Download This PaperInternational Channels of Transmission of Monetary Policy and the Mundellian Trilemma
43 Pages Posted: 12 Jan 2016 Last revised: 18 Mar 2023
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International Channels of Transmission of Monetary Policy and the Mundellian Trilemma
NBER Working Paper No. w21852
Number of pages: 43
Posted: 12 Jan 2016
Last Revised: 18 Mar 2023
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International Channels of Transmission of Monetary Policy and the Mundellian Trilemma
CEPR Discussion Paper No. DP11027
Number of pages: 44
Posted: 12 Jan 2016
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Date Written: January 2016
Abstract
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.
Suggested Citation: Suggested Citation
Rey, Helene, International Channels of Transmission of Monetary Policy and the Mundellian Trilemma (January 2016). NBER Working Paper No. w21852, Available at SSRN: https://ssrn.com/abstract=2713577
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