IDEAS home Printed from https://ideas.repec.org/a/blg/reveco/v67y2015i5p47-58.html
   My bibliography  Save this article

Risks Of Disregarding The Incompatible Trinity Rule: The Swiss Franc Crisis Case

Author

Listed:
  • BURNETE Sorin

    (Lucian Blaga University of Sibiu)

Abstract

When designing economic policies, governments must take account not only of economic laws but also of certain rules of thumb. The incompatible trinity is such rule, which states that a country cannot simultaneously have a fixed exchange rate regime, mobility of foreign capital and an independent monetary policy. Traditionally, the rule has been generally observed, whether knowingly or not. The recent crisis triggered by the removal of cap on the Swiss franc is an illustrative example of what might happen if the said rule is disregarded.

Suggested Citation

  • BURNETE Sorin, 2015. "Risks Of Disregarding The Incompatible Trinity Rule: The Swiss Franc Crisis Case," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 67(5), pages 47-58, September.
    • Handle: RePEc:blg:reveco:v:67:y:2015:i:5:p:47-58
    as

    Download full text from publisher

    File URL: http://economice.ulbsibiu.ro/revista.economica/archive/67504burnete.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    exchange rate; monetary policy; capital mobility; currency peg;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • F3 - International Economics - - International Finance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:blg:reveco:v:67:y:2015:i:5:p:47-58. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Eduard Alexandru Stoica (email available below). General contact details of provider: https://edirc.repec.org/data/feulbro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.