This article reconsiders experience under flexible exchange rates. The author first summarizes the claims about flexible rates in Milton Friedman’s classic 1953 paper to show that Friedman’s claims are more modest than is often supposed. He then presents some key facts about exchange rates and comparative variability of several variables under fixed and flexible rates. Next, he estimates a model of the so-called real exchange rate under Bretton Woods and flexible rates and tests for the effect of economic aggregates on the exchange rate. The model incorporates some of the principal variables affecting exchange rates suggested by Friedman.