Work

The Trilemma in History: Tradeoffs Among Exchange Rates, Monetary Policies, and Capital Mobility

Year: 2004

Type: article

Abstract: The exchange-rate regime is often seen as constrained by the monetary policy trilemma, which imposes a stark tradeoff among exchange stability, monetary independence, and capital market openness. Yet the trilemma has not gone without challenge. Some argue that under the modern float there could be limited monetary autonomy; others, that even under the classical gold standard domestic monetary autonomy was considerable. This paper studies the coherence of international interest rates over more than 130 years. The constraints implied by the trilemma are largely borne out by history.

Source: The Review of Economics and Statistics

DOI: 10.1162/0034653054638300

Authors: Maurice Obstfeld, Jay C. Shambaugh, Alan M. Taylor

Institutions: Center for Economic and Policy Research, University of California, Berkeley, Dartmouth College, Georgetown University, National Bureau of Economic Research, Centre for Economic Policy Research, University of California, Davis

Language: English

Topic: Global Financial Crisis and Policies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

Funders: National Science Foundation, European Science Foundation, University of California, Davis

OpenAlex ID: W2005961387

FWCI: 32.82

Cites: 41

Cited by: 912

Related to: 20