The author is Associate Director in the Monetary and Exchange Affairs Department of the International Monetary Fund (IMF). The views expressed in the paper are his own and should not be attributed to the IMF. A first draft of the paper was prepared during a period in which the author was a Guest Scholar at The Brookings Institution, and he is grateful to both the Institution and its staff for having provided an environment for reflection and writing that was as close to optimal as any author might wish.

The author would also like to acknowledge his indebtedness and express his gratitude to his colleagues in the IMF, both past and present. He regrets that they are too numerous to be listed here, but he wishes to point out that in their minds they carry a wealth of knowledge and experience rivaled only by the ideals they carry in their hearts. The author has benefited enormously from such knowledge, experience, and ideals ever since he joined the institution toward the end of the Bretton Woods era. This paper is but one proof.

A number of colleagues have contributed cheerfully to the effort of readying the manuscript for publication, and the author wishes to express his gratitude to Ann Greasley and Constance Strayer, who put the draft into readable form, and to Margaret Karsten, who edited the text to the everlasting benefit of its readers. Finally, the author gladly and gratefully acknowledges the support of S.J. Anjaria, who read an early draft, questioned some of its conclusions, and thus stimulated the author to come up with stronger and more persuasive arguments.

June 1992