The article explores how different monetary policies affect people in emerging market economies. By using a model with incomplete financial markets, the researchers found that managing exchange rates can benefit households in the tradable goods sector in the short term, but in the long run, it can lead to higher consumption volatility and lower welfare. A fixed exchange rate can also reduce welfare when the economy faces positive shocks to nontradable goods productivity or foreign interest rates. Interestingly, fiscal policy may be a more efficient way to achieve similar short-term distributional goals as exchange rate management.