IDEAS home Printed from https://ideas.repec.org/a/wsi/gejxxx/v21y2021i02ns2194565921500081.html
   My bibliography  Save this article

Foreign Capital And Domestic Funding Conditions: A Mundellian Trilemma Perspective

Author

Listed:
  • ALEKSANDAR STOJKOV

    (Iustinianus Primus Law Faculty, Ss. Cyril and Methodius University in Skopje, Blvd. Goce Delcev 9b, 1000 Skopje, Macedonia)

  • THIERRY WARIN

    (HEC Montréal, 3000, Chemin de la Côte-Sainte-Catherine, Montréal (Québec), Canada H3T 2A7, Canada)

Abstract

This study investigates and evaluates the impact of global funding conditions on private sector credit growth and controlling for the Mundellian Trilemma configuration. We contribute to the empirical literature by investigating the role of other conditioning factors such as the size of economies and their level of economic development. The more specific research goals are as follows: (i) To explore the different Trilemma configurations by income group and size of the economies; (ii) to enrich international macroeconomics literature on the role of Trilemma configurations and countries’ idiosyncrasies in assessing the impact of global financial conditions; and (iii) to formulate policy-relevant conclusions. We argue that — when assessing the impact of global financial conditions — the exchange rate regime and financial openness matter and the size of the economy and its income level. The high volatility in gross and net international capital flows redefined many trilemma configurations in the Great Recession aftermath. Many countries decided to shield their financial markets by reducing the degree of financial openness and moving toward intermediate or middle-ground positions in their Trilemma configurations.

Suggested Citation

  • Aleksandar Stojkov & Thierry Warin, 2021. "Foreign Capital And Domestic Funding Conditions: A Mundellian Trilemma Perspective," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 21(02), pages 1-22, June.
  • Handle: RePEc:wsi:gejxxx:v:21:y:2021:i:02:n:s2194565921500081
    DOI: 10.1142/S2194565921500081
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S2194565921500081
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://libkey.io/10.1142/S2194565921500081?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    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:wsi:gejxxx:v:21:y:2021:i:02:n:s2194565921500081. 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: Tai Tone Lim (email available below). General contact details of provider: https://www.worldscientific.com/worldscinet/gej .

    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.