EconStor >
University of California (UC) >
UC Santa Cruz, Economics Department >
Working Papers, Economics Department, UC Santa Cruz >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/64540
  

Full metadata record

DC FieldValueLanguage
dc.contributor.authorAizenman, Joshuaen_US
dc.date.accessioned2011-03-30en_US
dc.date.accessioned2012-09-28T12:41:59Z-
dc.date.available2012-09-28T12:41:59Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/64540-
dc.description.abstractThe policy Trilemma (the ability to accomplish only two policy objectives out of financial integration, exchange rate stability and monetary autonomy) remains a valid macroeconomic framework. The financial globalization during 1990s-2000s reduced the weighted average of exchange rate stability and monetary autonomy. An unintended consequence of financial globalization is the growing exposure of developing countries to capital flights, and deleveraging crises. The significant costs associated with these crises added financial stability to the Trilemma policy goals, modifying the Trilemma framework into the policy Quadrilemma. Emerging markets frequently coupled their growing financial integration with sizable hoarding of reserves, as means of self-insuring their growing exposure to financial turbulences. The global financial crisis of 2008-9 illustrated both the usefulness and the limitations of hoarding reserves as a selfinsurance mechanism. The massive deleveraging initiated by OECD countries in 2008 may provide the impetus for some emerging markets to impose soft capital controls in the form of regulations that restrain inflows of short terms funds. While modifying the global financial architecture to deal with the challenges of the 21th Centaury remains a work in progress, the extended Trilemma framework keeps providing useful insights about the trade-offs and challenges facing policy makers, investors, and central banks.en_US
dc.language.isoengen_US
dc.publisherUniv. of California at Santa Cruz, Dep. of Economics Santa Cruz, Calif.en_US
dc.relation.ispartofseriesWorking Papers, UC Santa Cruz Economics Department 678en_US
dc.subject.jelF02en_US
dc.subject.jelF31en_US
dc.subject.jelF33en_US
dc.subject.ddc330en_US
dc.titleThe impossible trinity - from the policy trilemma to the policy quadrilemmaen_US
dc.typeWorking Paperen_US
dc.identifier.ppn654998868en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Working Papers, Economics Department, UC Santa Cruz

Files in This Item:
File Description SizeFormat
654998868.pdf375.64 kBAdobe PDF
No. of Downloads: Counter Stats
Show simple item record
Download bibliographical data as: BibTeX

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.