corners, but rather to pronounce as unsustainable a segment of that line representing a variety of soft pegging exchange rate arrangements. [ italics in the original ] … for countries open to international capital flows, it [ the bipolar view ] includes as sustainable regimes both very hard pegs and a variety of floating rate arrangements, including managed floats. for countries not yet open to international capital flows, it includes the full gamut of exchange rate arrangements. the question that then arises is what exchange rate arrangements are excluded by the bipolar view. the answer is : for countries open to international capital flows, exchange rate systems in which the government is viewed as being committed to defending a particular value of the exchange rate, or a narrow range of exchange rates, but has not made the institutional commitments that both constrain and enable monetary policy to be devoted to the sole goal of defending the parity. … " during the decade of the 1990s, it seemed that exchange rate systems were becoming bipolar in the sense defined above, as can be seen in the comparison for developed and emerging market countries 1 between the data for 1991 and 1999 in figure 1. 2 figure 1 also shows what has happened since then for the group of developed and emerging market countries. in brief, the shift towards bipolarity that was evident in the data for 1991 - 1999, has continued, but at a reduced pace. the major changes in the distribution between 1991 and i use the " developed and emerging market countries " category as an approximation to countries whose capital accounts are open, though in fact that is not true for all the countries listed as emerging ( see table 2 ), among them china. the data in this paper differ somewhat from those in fischer ( 2001 ), because in the former the exchange rate regimes as of each year relate to countries that were members of the fund in that particular year, whereas in this paper the data for each year are those for countries that were fund members in 2006. 1999 were due to the introduction of the euro and the emerging market financial crises of that decade. nothing on a similar scale has happened in this decade, although the number of countries in emu continues to grow, albeit slowly. as a reminder, the classification of exchange rate systems used in figure 1, and in my previous paper, is that of the staff of the imf, based on their evaluation of the de facto exchange rate arrangement in place at the time. 3 table 1 lists the categories of exchange rate regimes, with the intermediate

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