The issues of causes and consequences of exchange rate flexibility discussed in part 2 pose different policy dilemmas for different countries and, accordingly, evoke different responses from national policy makers. Certainly, whether or not exchange-rate volatility is judged excessive would depend, among other things, on the commodity composition and geographical distribution of a country's foreign trade or the degree of openness of its financial markets. Similarly, the strength of inflationary consequences of changes in exchange rates would be perceived differently by different countries, depending on a multitude of structural and institutional factors.
The purpose of part 3 is to provide concrete policy perspectives on the issues of causes and effects of exchange-rate volatility and to analyze those issues from the vantage points of particular countries. Even though responses to exchange-rate fluctuations since 1973 by various countries have displayed a dazzling diversity, because of time constraints the policies of only a few countries could be analyzed in the requisite detail. The United States, West Germany cum Switzerland, and Japan were selected, not only because their currencies are the most important ones in international finance but also because the experiences of these countries typify policy quandaries faced by weak-currency and strongcurrency issuers. Although each of the papers presented in part 3 reviews the experience with floating since its inception, emphasis is focused on the cause of exchange-rate changes and policy debates and measures that have taken place in the past three years.