The article presents a new theory on how stabilizing exchange rates can benefit a country's economy. By choosing the right exchange rate regime, policymakers can make their currency a safer investment for international investors. This can lead to increased capital accumulation, higher wages, and a greater share of world wealth for smaller economies. The model suggests that small countries should stabilize their exchange rates relative to the largest economy, while larger economies should let their exchange rates float. This approach mirrors real-world exchange rate arrangements.