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
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