IDEAS home Printed from https://ideas.repec.org/a/aio/aucsse/v1y2019i47p79-86.html
   My bibliography  Save this article

The Exchange Rate Trilemma In Europe: A Case Study

Author

Listed:
  • Mercea (Handro) Patricia Amalia

    (University of Craiova Faculty of Economics and Business Administration)

Abstract

The accession in European Union of ten Central and Eastern European countries, marks the end of the first phase of integration of these economies into Western European economic bloc. In many respects, similarities with developed countries begin to be obvious: opening borders, free capital flows and free people movement, trade development, greater transparency of monetary and fiscal policy, low inflation rates, and macroeconomic stability. The next step - the euro adoption - is both an obligation and a challenge. The debate about „real convergence” and „open economy” sets up the dilemmas for monetary authorities. The result will end into a mix between: real currency appreciation, an increased current account deficit, the accumulation of inflation and international reserve.

Suggested Citation

  • Mercea (Handro) Patricia Amalia, 2019. "The Exchange Rate Trilemma In Europe: A Case Study," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 1(47), pages 79-86, November.
    • Handle: RePEc:aio:aucsse:v:1:y:2019:i:47:p:79-86
    as

    Download full text from publisher

    File URL: http://feaa.ucv.ro/annals/v1_2019/010.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Josef Christl, 2006. "Regional currency arrangements: insights from Europe," International Economics and Economic Policy, Springer, vol. 3(3), pages 209-219, December.
    2. Hélène Rey, 2015. "Dilemma not Trilemma: The Global Financial Cycle and Monetary Policy Independence," NBER Working Papers 21162, National Bureau of Economic Research, Inc.
    3. Josef Christl, 2006. "Regional Currency Arrangements: Insights from Europe," Working Papers 125, Oesterreichische Nationalbank (Austrian Central Bank).
    4. Xavier Gabaix & Matteo Maggiori, 2015. "International Liquidity and Exchange Rate Dynamics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(3), pages 1369-1420.
    5. Josef Christl, 2006. "Regional Currency Arrangements: Insights from Europe," Working Papers 42, Bank of Greece.
    6. Mr. Akira Ariyoshi & Mr. Andrei A Kirilenko & Ms. Inci Ötker & Mr. Bernard J Laurens & Mr. Jorge I Canales Kriljenko & Mr. Karl F Habermeier, 2000. "Capital Controls: Country Experiences with Their Use and Liberalization," IMF Occasional Papers 2000/009, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John Williamson, 2006. "A worldwide system of reference rates," International Economics and Economic Policy, Springer, vol. 3(3), pages 341-352, December.
    2. International Monetary Fund, 2009. "Uganda: Selected Issues," IMF Staff Country Reports 2009/037, International Monetary Fund.
    3. Norring, Anni, 2022. "Taming the tides of capital: Review of capital controls and macroprudential policy in emerging economies," BoF Economics Review 1/2022, Bank of Finland.
    4. Davis, J. Scott & Fujiwara, Ippei & Huang, Kevin X.D. & Wang, Jiao, 2021. "Foreign exchange reserves as a tool for capital account management," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 473-488.
    5. Castillo, Paul & Medina, Juan Pablo, 2021. "Foreign Exchange Intervention, Capital Flows, and Liability Dollarization," Working Papers 2021-006, Banco Central de Reserva del Perú.
    6. Zineddine Alla, 2017. "Optimal policies in international macroeconomics [Politiques optimales en macroéconomie internationale]," SciencePo Working papers Main tel-03436551, HAL.
    7. Paolo Cavallino & Mr. Damiano Sandri, 2018. "The Expansionary Lower Bound: Contractionary Monetary Easing and the Trilemma," IMF Working Papers 2018/236, International Monetary Fund.
    8. Niepmann, Friederike & Schmidt-Eisenlohr, Tim, 2023. "Institutional investors, the dollar, and U.S. credit conditions," Journal of Financial Economics, Elsevier, vol. 147(1), pages 198-220.
    9. Stijn Claessens & M Ayhan Kose, 2018. "Frontiers of macrofinancial linkages," BIS Papers, Bank for International Settlements, number 95.
    10. Alexander Rodnyansky & Yannick Timmer & Naoki Yago, 2023. "Intervening against the Fed," CESifo Working Paper Series 10575, CESifo.
    11. Fong, Tom Pak Wing & Sze, Angela Kin Wan & Ho, Edmund Ho Cheung, 2021. "Assessing cross-border interconnectedness between shadow banking systems," Journal of International Money and Finance, Elsevier, vol. 110(C).
    12. Stijn Claessens & M. Ayhan Kose, 2017. "Asset prices and macroeconomic outcomes: A survey," CAMA Working Papers 2017-76, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    13. Jiang, Zhengyang, 2021. "US Fiscal cycle and the dollar," Journal of Monetary Economics, Elsevier, vol. 124(C), pages 91-106.
    14. You, Yu & Liu, Fangzheng & Yang, Da, 2023. "Macroprudential policy, capital flow management and monetary policy independence," The Quarterly Review of Economics and Finance, Elsevier, vol. 88(C), pages 116-132.
    15. Goldberg, Linda S. & Krogstrup, Signe, 2023. "International capital flow pressures and global factors," Journal of International Economics, Elsevier, vol. 146(C).
    16. repec:spo:wpmain:info:hdl:2441/6kvjk9o32n8m88c6de3gc0gltj is not listed on IDEAS
    17. José Antonio Ocampo, 2017. "Resetting the International Monetary (Non)System," Books, Red Investigadores de Economía, number 2017-11, March.
    18. Marcus Hagedorn, 2021. "An Equilibrium Theory of Nominal Exchange Rates," CESifo Working Paper Series 9290, CESifo.
    19. Garcia-Barragan, Fernando & Liu, Guangling, 2022. "A new approach to capital control for emerging market economies," The North American Journal of Economics and Finance, Elsevier, vol. 61(C).
    20. Matteo Maggiori & Brent Neiman & Jesse Schreger, 2020. "International Currencies and Capital Allocation," Journal of Political Economy, University of Chicago Press, vol. 128(6), pages 2019-2066.
    21. Xing Guo & Pablo Ottonello & Diego J. Perez, 2023. "Monetary Policy and Redistribution in Open Economies," Journal of Political Economy Macroeconomics, University of Chicago Press, vol. 1(1), pages 191-241.

    More about this item

    Keywords

    monetary policy; exchange rate; inflation; currency union; european integration;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aio:aucsse:v:1:y:2019:i:47:p:79-86. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anca Bandoi (email available below). General contact details of provider: https://edirc.repec.org/data/fecraro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.