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

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...

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Main Author: Milei, Javier Gerardo
Format: Online
Language:spa
Published: Instituto de Economía y Finanzas. Facultad de Ciencias Económicas. Universidada Nacional de Córdoba. 2004
Subjects:
Online Access:https://revistas.unc.edu.ar/index.php/REyE/article/view/3807
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author Milei, Javier Gerardo
author_facet Milei, Javier Gerardo
author_sort Milei, Javier Gerardo
collection Portal de Revistas
description 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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publisher Instituto de Economía y Finanzas. Facultad de Ciencias Económicas. Universidada Nacional de Córdoba.
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spelling oai:ojs.revistas.unc.edu.ar:article-38072022-04-06T23:17:38Z Real Exchange Rate Targeting: Currency or Capital Control Problem? Fiscal Policy Real Exchange Rate Targeting: ¿Trilema Monetario o Control de Capitales? La Política Fiscal Milei, Javier Gerardo fiscal policy política fiscal 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. En el presente trabajo se demuestra que la imposibilidad de alcanzar un objetivo de tipo de cambio real postulada por el trilema monetario se supera agregando un instrumento de política económica. Y ante la disyuntiva de elegir entre la política fiscal contracíclica y el control de capitales deberíamos inclinarnos por la primera ya que da como resultado un equilibrio estable, mientras que la segunda no, al margen de lo poco razonable que sería el control de capitales si la economía mostrara un bajo nivel de capitalización.     Instituto de Economía y Finanzas. Facultad de Ciencias Económicas. Universidada Nacional de Córdoba. 2004-12-01 info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion application/pdf https://revistas.unc.edu.ar/index.php/REyE/article/view/3807 10.55444/2451.7321.2004.v42.n2.3807 Revista de Economía y Estadística; Vol. 42 No. 2 (2004); 63-87 Revista de Economía y Estadística; Vol. 42 Núm. 2 (2004); 63-87 2451-7321 0034-8066 10.55444/2451.7321.2004.v42.n2 spa https://revistas.unc.edu.ar/index.php/REyE/article/view/3807/5006 Derechos de autor 2004 Javier Gerardo Milei http://creativecommons.org/licenses/by-nc-nd/4.0
spellingShingle fiscal policy
política fiscal
Milei, Javier Gerardo
Real Exchange Rate Targeting: Currency or Capital Control Problem? Fiscal Policy
title Real Exchange Rate Targeting: Currency or Capital Control Problem? Fiscal Policy
title_alt Real Exchange Rate Targeting: ¿Trilema Monetario o Control de Capitales? La Política Fiscal
title_full Real Exchange Rate Targeting: Currency or Capital Control Problem? Fiscal Policy
title_fullStr Real Exchange Rate Targeting: Currency or Capital Control Problem? Fiscal Policy
title_full_unstemmed Real Exchange Rate Targeting: Currency or Capital Control Problem? Fiscal Policy
title_short Real Exchange Rate Targeting: Currency or Capital Control Problem? Fiscal Policy
title_sort real exchange rate targeting currency or capital control problem fiscal policy
topic fiscal policy
política fiscal
topic_facet fiscal policy
política fiscal
url https://revistas.unc.edu.ar/index.php/REyE/article/view/3807
work_keys_str_mv AT mileijaviergerardo realexchangeratetargetingcurrencyorcapitalcontrolproblemfiscalpolicy
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