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International channels of transmission of monetary policy and the Mundellian Trilemma

Journal

IMF Economic Review

Subject

Economics

Authors / Editors

Rey H

Biographies

Publication Year

2016

Abstract

This is the Mundell-Fleming lecture given at the IMF on November 13, 2014. This lecture argues that the Global Financial Cycle is a challenge for the validity of the Mundellian trilemma. The paper presents evidence that U.S. 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.

Available on ECCH

No


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