Currency Wars, Coordination, and Capital Controls

Olivier Blanchard

Chapter 4 in The Asian Monetary Policy Forum:Insights for Central Banking, 2021, pp 134-157 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The strong monetary policy actions undertaken by advanced economies’ central banks have led to complaints of “currency wars” by some emerging market economies, and to widespread demands for more macroeconomic policy coordination. This chapter revisits these issues. It concludes that, while advanced economies’ monetary policies indeed have had substantial spillover effects on emerging market economies, there was and still is little room for coordination. It then argues that, from the viewpoints of both macro and financial stability, restrictions on capital flows were and are the more natural instrument to achieve a better outcome.

Keywords: Monetary Policy; Price Stability; Monetary Sovereignty; Monetary Policy Independence; Macroprudential Policies Financial Stability; Financial Volatility; Financial Globalization; Capital Mobility Trilemma; Dilemma; Small Open Economies; Emerging Market Economies; Exchange Rate Regime; Floating Exchange Rate; Pegged Exchange Rate; Real Exchange Rate; Nominal Exchange Rate; International Monetary System; Bond Markets; International Claims; Currency Market; Market Liberalization; Capital Control; Exchange Rate Intervention; Foreign Exchange Reserves; Dollar Hegemon; Dollar Dominance; International Payment System; Invoicing Currency; Integrated Policy Framework; Risk-on; Risk-off; Safe Assets; Global Financial Architecture (search for similar items in EconPapers)
JEL-codes: E4 E5 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Currency Wars, Coordination, and Capital Controls (2017)
Working Paper: Currency Wars, Coordination, and Capital Controls (2016)
Working Paper: Currency Wars, Coordination, and Capital Controls (2016)
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