Global financial conditions and monetary policy autonomy
"Is the Mundell-Fleming trilemma alive and well? International co-movement of asset prices takes place alongside synchronized business cycles, complicating the identification of financial spillovers and assessments of monetary policy autonomy. A benchmark for interest rate comovement is to impo...
| Main Authors: | , , |
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| Institution: | ETUI-European Trade Union Institute |
| Format: | TEXT |
| Language: | English |
| Published: |
Washington, DC
2016
IMF |
| Subjects: | |
| Online Access: | https://www.labourline.org/KENTIKA-19102708124919209809-Global-financial-conditions-an.htm |
| _version_ | 1771659899986509824 |
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| author | Caceres, Carlos Carriere-Swallow, Yan Gruss, Bertrand |
| author_facet | Caceres, Carlos Carriere-Swallow, Yan Gruss, Bertrand |
| collection | Library items |
| description | "Is the Mundell-Fleming trilemma alive and well? International co-movement of asset prices takes place alongside synchronized business cycles, complicating the identification of financial spillovers and assessments of monetary policy autonomy. A benchmark for interest rate comovement is to impose the null hypothesis that central banks respond only to the outlook for domestic inflation and output. We show that common approaches used to estimate interest rate spillovers tend to understate the degree of monetary autonomy enjoyed by small open economies with flexible exchange rates. We propose an empirical strategy that partials out those spillovers that are associated with impaired monetary autonomy. Using this approach, we revisit the predictions of the trilemma and find more compelling evidence that flexible exchange rates deliver monetary autonomy than prior work has suggested." |
| format | TEXT |
| id | 19102708124919209809_256f262aa9634d0cb44b3cebea7ffd94 |
| institution | ETUI-European Trade Union Institute |
| is_hierarchy_id | 19102708124919209809_256f262aa9634d0cb44b3cebea7ffd94 |
| is_hierarchy_title | Global financial conditions and monetary policy autonomy |
| language | English |
| physical | 37 p. Digital |
| publishDate | 2016 |
| publisher | Washington, DC IMF |
| spellingShingle | Caceres, Carlos Carriere-Swallow, Yan Gruss, Bertrand banking business cycle economic conditions international monetary policy Global financial conditions and monetary policy autonomy |
| thumbnail | https://www.labourline.org/Image_prev.jpg?Archive=106395792457 |
| title | Global financial conditions and monetary policy autonomy |
| topic | banking business cycle economic conditions international monetary policy |
| url | https://www.labourline.org/KENTIKA-19102708124919209809-Global-financial-conditions-an.htm |