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A Fixation with Floating: The Politics of Canada's Exchange Rate Regime

Published online by Cambridge University Press:  19 July 2005

Eric Helleiner
Eric Helleiner
Affiliation:
Trent University
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Abstract

Abstract. Since the 1930s, Canadian policy makers have demonstrated an unusually strong commitment to a floating exchange rate regime. A fixed exchange rate regime was embraced for only two brief periods between 1939–1950 and 1962–1970. This article examines the political basis of Canada's longstanding “fixation with floating,” an issue that is unexplored in existing scholarly literature. Drawing on the growing literature examining the politics of exchange rate regimes, the article shows how Canada's longstanding commitment to floating has stemmed from a combination of distinct domestic private economic interests, the beliefs of state policy makers, and the unique nature of the US-Canada relationship.

Résumé. Depuis les années 1930, les responsables de la politique monétaire canadienne ont manifesté une prédilection soutenue pour un taux de change flottant. Le pays n'a connu de taux de change fixe que pendant deux courtes périodes, de 1939 à 1950 et de 1962 à 1970. Cet article examine les fondements politiques de cette préférence, sujet qui reste inexploré dans la littérature existante. S'inspirant des travaux de plus en plus nombreux sur la politique des taux de change, l'article démontre que la source politique de cette préférence pour un taux de change flottant réside dans les intérêts économiques des entreprises, les convictions des décisionnaires et la nature unique de la relation entre le Canada et les États-Unis.

Type
Research Article
Information
Canadian Journal of Political Science/Revue canadienne de science politique , Volume 38 , Issue 1 , March 2005 , pp. 23 - 44
Copyright
© 2005 Cambridge University Press

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