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The Financial Crisis, Rethinking of the Global Financial Architecture, and the Trilemma

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  • Joshua Aizenman
  • Menzie D. Chinna
  • Hiro Ito

Abstract

This paper extends their previous paper (Aizenman, Chinn, and Ito 2008) and explores some of the unexplored questions. First, they examine the channels through which the trilemma policy configurations affect output volatility. Secondly, they investigate how trilemma policy configurations affect the output performance of the economies under severe crisis situations. Thirdly, they look into how trilemma configurations have evolved in the aftermath of economic crises in the past. They find that trilemma policy configurations and external finances affect output volatility mainly through the investment channel. [ADBI Working Paper 213]

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  • Joshua Aizenman & Menzie D. Chinna & Hiro Ito, 2010. "The Financial Crisis, Rethinking of the Global Financial Architecture, and the Trilemma," Working Papers id:3138, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:3138
    Note: Institutional Papers
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    Cited by:

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    2. Padhan, Hemachandra & Sahu, Santosh Kumar & Dash, Umakant, 2021. "Non-linear analysis of international reserve, trade and trilemma in India," The Journal of Economic Asymmetries, Elsevier, vol. 23(C).
    3. Inderjit Kaur & Nirvikar Singh, 2014. "Financial Integration and Financial Development in East Asia," Millennial Asia, , vol. 5(1), pages 1-22, April.
    4. Eleftherios Thalassinos & Theodore V. Stamatopoulos, 2015. "The Trilemma and the Eurozone: A Pre-announced Tragedy of the Hellenic Debt Crisis," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 27-40.
    5. Joshua Aizenman & Rajeswari Sengupta, 2013. "Financial Trilemma in China and a Comparative Analysis with India," Pacific Economic Review, Wiley Blackwell, vol. 18(2), pages 123-146, May.
    6. Herwartz, Helmut & Roestel, Jan, 2017. "Mundell’s trilemma: Policy trade-offs within the middle ground," Journal of International Money and Finance, Elsevier, vol. 75(C), pages 1-13.
    7. Bicaba, Zorobabel, 2011. "Growth and financial reforms trajectory: an optimal matching sequence analysis approach," MPRA Paper 34057, University Library of Munich, Germany.
    8. Jong-Eun Lee, 2016. "Exchange Rate Dynamics with Foreign Reserves: Revisiting the Dornbusch Overshooting Model," Review of Development Economics, Wiley Blackwell, vol. 20(2), pages 406-414, May.

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    More about this item

    Keywords

    trilemma; policy; performance; economic; finances;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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