There are a number of examples of exchange rate systems.

a. The Bretton Woods system, set up after World War II, pegged exchange rates to the U.S. dollar. It collapsed in 1971 after U.S. inflation began to rise.

b. Most fixed exchange rate regimes are no longer thought to be viable in the absence of capital controls.

c. Two that may work are currency boards and dollarization (or euroization).

d. With a currency board, the central bank holds enough foreign currency reserves to exchange the entire monetary base at the promised exchange rate.

e. Argentina’s currency board collapsed when the regional governments began printing their own money.

f. Dollarization is the total conversion of an economy from its own currency to the currency of another country.
g. Several Latin American countries have adopted the dollar recently, with good results over the short run. Several small European countries have adopted the euro.