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Asia confronts the impossible trinity

Ila Patnaik () and Ajay Shah ()

Working Papers from National Institute of Public Finance and Policy

Abstract: In this paper, we examine capital account openness and exchange rate flexibility in 11 Asian countries. Asia has made slow progress on de jure capital account openness, but has made much more progress on de facto capital account openness. While there is a slow pace of increase in exchange rate flexibility, most Asian countries continue to have largely inflexible exchange rates. This combination - of moving forward with de facto capital account integration without bringing in exchange rate exibility - has lead to procyclicality of monetary policy when capital flows are procyclical. The paper emphasises the case for a consistent monetary policy framework.

Pages: 44
Date: 2010-01
New Economics Papers: this item is included in nep-ifn, nep-mon, nep-opm and nep-sea
Note: Working Paper 64, 2010
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Chapter: Asia Confronts the Impossible Trinity (2012) Downloads
Working Paper: Asia Confronts the Impossible Trinity (2010) Downloads
Working Paper: Asia confronts the impossible trinity (2010) Downloads
Working Paper: Asia Confronts the Impossible Trinity (2010) Downloads
Working Paper: Asia Confronts the Impossible Trinity (2010) Downloads
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