Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105914
Authors: 
Palley, Thomas I.
Year of Publication: 
2009
Series/Report no.: 
IMK Working Paper 1/2009
Abstract: 
This paper reexamines the issue of international financial capital mobility, which is today's economic orthodoxy. Discussion is often framed in terms of the impossible trinity. That framing distorts discussion by representing capital mobility as having equal significance with sovereign monetary policy and control over exchange rates. It also distorts discussion by ignoring possibilities for coordinated monetary policy and exchange rates, and for managed capital flows. The case for capital mobility rests on neo-classical economic efficiency arguments and neo-liberal political arguments. The case against capital mobility is based on Keynesian macroeconomic inefficiency arguments, neo-Walrasian market failure arguments, and neo-Marxian arguments regarding distortion of the social structure of accumulation. Close examination shows the case for capital mobility to be extremely flimsy, pointing to the ideological dimension behind today's policy orthodoxy.
Subjects: 
capital mobility
capital controls
impossible trinity.
JEL: 
F00
F32
F33
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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