Reprint: Two challenges from globalization

Maurice Obstfeld

Journal of International Money and Finance, 2021, vol. 114, issue C

Abstract: This speech highlights two channels through which globalization poses challenges for monetary policy. The first channel is through the global determination of the average world natural real rate of interest, which implies that saving and investment shifts abroad can influence the domestic interest rate setting consistent with price stability. The second channel is through global digital payments systems, which may compromise domestic policy sovereignty through effects on both monetary and financial stability.

Keywords: Globalization; Digital currency; Natural real interest rate (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:114:y:2021:i:c:s0261560621000590

DOI: 10.1016/j.jimonfin.2021.102408

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