The paper looks at how different monetary policies affect the well-being of a small country that exports commodities. It finds that having a flexible exchange rate is usually better than a fixed one. However, the costs of a fixed exchange rate can change depending on how much the country shares risks with other countries. When markets are open and smooth, the costs are low. But when the country is isolated financially, the costs are high. The study also shows that certain types of inflation targeting may not always be the best choice, and the best option can depend on how goods are priced.