Countries have allowed market forces to work or have participated in systems of managed exchanges rates.

The speech is a gem of lucidity on the subject of managed exchanged rates.

Little Economic Effect His broader objection to a move toward globally managed exchange rates, however, is that it would not be practical.

But however suspicious Mrs Thatcher may be of managed exchange rate systems, she dislikes a falling pound as much as anyone.

It is hardly surprising, therefore, that he should view with dismay the return to a managed exchange rate as part of the policy of Europeanisation of the British economy.

Others have argued that a closely managed exchange rate is an effect rather than a cause of DLD, a claim empirically supported in Berkmen and Cavallo (2007).

The British Government may not have wanted to be forced out of Europe's system of managed exchange rates, but it now seems to be following a cheap pound policy to stimulate exports.

In economies with fixed or heavily managed exchange rate regimes, for instance, an abrupt change in regime can reveal the exposure of actors who have not hedged for exchange rate risk.

The one exception is the European Monetary System, where member countries have continued to operate some form of managed exchange rates, although parity adjustments here have been much more frequent than in the Bretton Woods era.

(Ireland was able to decouple the punt from sterling only with the creation of the ERM in 1979 - a system of managed exchange rates only available as a precursor to full monetary union, ie adopting the euro.)

However, a state's central bank can still intervene in the markets to effect a devaluation - if it sells its own currency to buy other currencies then this will cause the value of its own currency to fall - a practice common with states that have a managed exchange rate regime.

The decision in 1990 by Britain to join the ERM was, indeed, not the first time this century that she has tried to defend herself from the possible consequences of wrong decisions by her own politicians by linking herself to those made by politicians in another country, through the mechanism of a fixed or managed exchange rate.

The truth of the matter is that the policy of placing the interests of a managed exchange rate above the real needs of the economy can only be conceived sensibly as part and parcel of a geopolitical strategy to move Britain towards participation in a Single Currency, as required by the Treaty of Maastricht.

Some of these are already apparent following Britain's entry into the ERM: the stoking up of inflation in the mid-1980s and the creation in the 1990s of a million or so extra unemployed, together with thousands of bankruptcies, can properly be ascribed in the main to priority having been given to a managed exchange rate.