Dallas S. Batten and Mack Ott point out that, when these criticisms are considered more carefully, they reflect a shared misinterpretation of the data and, at times, a misunderstanding of exchange rate determination itself. In investigating the merits of these complaints against floating exchange rates, the authors provide a simple analytic description of the process through which exchange rates are determined and identify the important influences that affect exchange rate movements. They then apply this framework to the analysis of five commonly held views about exchange rates and demonstrate how these are inconsistent with both the data and generally accepted economic theory. The authors conclude that, contrary to the beliefs of many, floating exchange rates merely reflect international economic conditions; they do not create them.