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- W3034098857 abstract "Contrary to Mundell's trilemma, we show that free capital mobility may prevent monetary policy from ensuring output stability even if the exchange rate is flexible due to the existence of an Effective Lower Bound. The ELB is an interest rate threshold below which monetary easing becomes contractionary because of adverse effects on credit supply. A tightening in global monetary and financial conditions increases the ELB and may force central banks to hike rates even though domestic economic activity contracts. We also show that the ELB gives rise to a novel inter-temporal trade-off for monetary policy and calls for using a broad range of policy tools to restore monetary transmission." @default.
- W3034098857 created "2020-06-12" @default.
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- W3034098857 date "2023-01-01" @default.
- W3034098857 modified "2023-09-23" @default.
- W3034098857 title "The open-economy ELB: Contractionary monetary easing and the trilemma" @default.
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- W3034098857 doi "https://doi.org/10.1016/j.jinteco.2022.103691" @default.
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