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International Channels of Transmission of Monetary Policy and the Mundellian Trilemma

Listed author(s):
  • Rey, Hélène

This lecture argues that the Global Financial Cycle is a challenge for the validity of the Mundellian trilemma. I present evidence that US monetary policy shocks are transmitted internationally and affect financial conditions even in inflation targeting economies with large financial markets. Hence flexible exchange rates are not enough to guarantee monetary autonomy in a world of large capital flows.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 11027.

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Date of creation: Dec 2015
Handle: RePEc:cpr:ceprdp:11027
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