Real Exchange Rate Targeting. ¿Trilema Monetario o Control de Capitales? La Política Fiscal
AbstractThe paper shows that the impossibility to reach a real exchange rate target, as proposed by the "Monetary Trilemma" can be circumvented by adding one policy instrument. In the choice between countercyclical fiscal policy and control of capital movements, the first one appears as the preferred option, since it provides a stable equilibrium. Not only an equilibrium is not achieved in the second case, but the restrictions to capital movements in an economy whith a low level of capitalization does not look like a sensible choice.
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Bibliographic InfoArticle provided by Universidad Nacional de Córdoba, Facultad de Ciencias Económicas, Instituto de Economía y Finanzas in its journal Revista de Economía y Estadística.
Volume (Year): XLII (2004)
Issue (Month): 2 (January)
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Foreign Exchange; Open Economy Macroeconomics;
Find related papers by JEL classification:
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dornbusch, Rudiger, 1976.
" The Theory of Flexible Exchange Rate Regimes and Macroeconomic Policy,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 78(2), pages 255-75.
- R. Dornbusch, 1975. "The Theory of Flexible Exchange Rate Regimes and Macroeconomic Policy," Working papers 165, Massachusetts Institute of Technology (MIT), Department of Economics.
- Robert A. Mundell, 1962. "The Appropriate Use of Monetary and Fiscal Policy for Internal and External Stability," IMF Staff Papers, Palgrave Macmillan, vol. 9(1), pages 70-79, March.
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