Based on the theory (Feenstra and Taylor, 2016), three key conditions faced by open economies: a fixed exchange rate that can enhance stability in trade and investment, free international capital mobility that can promote integration, efficiency, and risk-sharing, and monetary policy autonomy that can provide control over the economy’s business cycle. The trilemma suggests thatContinue reading “On Dilemma Not Trilemma: The Global Financial Cycle and Monetary Policy Independence “
hope. 