International Channels of Transmission of Monetary Policy and the Mundellian Trilemma

Helene Rey

No 11027, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This lecture argues that the Global Financial Cycle is a challenge for the validity of the Mundellian trilemma. I present evidence that US 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.

Keywords: Global financial cycle; Monetary policy; Trilemma (search for similar items in EconPapers)
JEL-codes: F33 F41 F42 (search for similar items in EconPapers)
Date: 2015-12
New Economics Papers: this item is included in nep-cba, nep-ifn, nep-mon and nep-opm
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Citations: View citations in EconPapers (21)

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Related works:
Journal Article: International Channels of Transmission of Monetary Policy and the Mundellian Trilemma (2016)
Working Paper: International Channels of Transmission of Monetary Policy and the Mundellian Trilemma (2016)
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