Real Exchange Rate Targeting: Currency or Capital Control Problem? Fiscal Policy

Authors

  • Javier Gerardo Milei

DOI:

https://doi.org/10.55444/2451.7321.2004.v42.n2.3807

Keywords:

fiscal policy

Abstract

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.

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Published

2004-12-01

How to Cite

Milei, J. G. (2004). Real Exchange Rate Targeting: Currency or Capital Control Problem? Fiscal Policy. Revista De Economía Y Estadística, 42(2), 63–87. https://doi.org/10.55444/2451.7321.2004.v42.n2.3807

Issue

Vol. 42 No. 2 (2004)

Section

ARTÍCULOS

License

Copyright (c) 2004 Javier Gerardo Milei

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