Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/210145 
Year of Publication: 
2018
Series/Report no.: 
Working Paper No. 9/2018
Publisher: 
Norges Bank, Oslo
Abstract: 
In this paper we study financial spillovers from the European Central Bank's (ECB) monetary policy and communication, and whether they have consequences for the effectiveness of domestic monetary policy of small open economies. Recent work suggests that the "trilemma" in international economics as we used to know it, is actually a dilemma: small open economies with floating exchange rate regimes can only have independent monetary policies when the capital account is managed. Our findings show that domestic monetary policy is still effective, but that spillover effects, particularly from the ECB's communication, reduce domestic control over the longer end of the yield curve.
Subjects: 
monetary policy
forward guidance
international spillovers
asset prices
small open economies
JEL: 
E43
E44
E52
E58
G12
Persistent Identifier of the first edition: 
ISBN: 
978-82-8379-052-8
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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