Real Exchange Rate Targeting: Currency or Capital Control Problem? Fiscal Policy
DOI:
https://doi.org/10.55444/2451.7321.2004.v42.n2.3807Keywords:
fiscal policyAbstract
The paper shows that the impossibility to reach a real exchange ratetarget, as proposed by the "Monetary Trilemma" can be circumvented byadding one policy instrument. In the choice between countercyclical fiscalpolicy and control of capital movements, the first one appears as thepreferred option, since it provides a stable equilibrium. Not only anequilibrium is not achieved in the second case, but the restrictions tocapital movements in an economy whith a low level of capitalization doesnot look like a sensible choice.
Downloads
Downloads
Published
Issue
Section
License
Copyright (c) 2004 Javier Gerardo Milei
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Authors who have publications with this journal agree to the following terms:
Authors retain their copyright and grant the journal the right of first publication of their work, which is simultaneously subject to the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License that allows third parties to share the work provided that its author and first publication in this journal are indicated.
Authors may adopt other non-exclusive licensing arrangements for distribution of the published version of the work (e.g. depositing it in an institutional telematic archive or publishing it in a monographic volume) as long as the initial publication in this journal is indicated.
Authors are allowed and encouraged to disseminate their work via the Internet (e.g. in institutional telematic archives or on their website) before and during the submission process, which can lead to interesting exchanges and increase citations of the published work. (See The Open Access Effect)
