The Review of Economics and Statistics Vol. 87 No. 3 2005

The Trilemma in History: Tradeoffs Among Exchange Rates, Monetary Policies, and Capital Mobility

Maurice Obstfeld^1,2; Jay C. Shambaugh^3,4,5; Alan M. Taylor^1,6,7,8

¹ Center for Economic and Policy Research · ² University of California, Berkeley · ³ Dartmouth College · ⁴ Georgetown University · ⁵ Dartmouth Hospital · ⁶ National Bureau of Economic Research · ⁷ Centre for Economic Policy Research · ⁸ University of California, Davis

Abstract

The exchange-rate regime is often seen as constrained by the monetary policy trilemma, which imposes a stark tradeoff among exchange stability, monetary independence, and capital market openness. Yet the trilemma has not gone without challenge. Some (e.g., Others (e.g., This paper studies the coherence of international interest rates over more than 130 years. The constraints implied by the trilemma are largely borne out by history.

DOI

10.1162/0034653054638300

Volume

87

Issue

3

Pages

423-438

Language

en

Sources

openalex crossref

Cite

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