Wray explains the implications of exchange rate regimes for Modern Money Theory:
Floating vs fixed exchange rate regimes. The previous blogs were quite general and apply to all countries that use a domestic currency. It does not matter whether these currencies are pegged to a foreign currency or to a precious metal, or whether they are freely floating—the principles are the same. In this blog we will examine the implications of exchange regimes for our analysis.
Read the full post at MMP#11: MODERN MONEY THEORY AND ALTERNATIVE EXCHANGE RATE REGIMES