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Two challenges from globalization

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  • Obstfeld, Maurice

Abstract

This speech highlights two channels through which globalization poses challenges for monetary policy. The first channel is through the global determination of the average world natural real rate of interest, which implies that saving and investment shifts abroad can influence the domestic interest rate setting consistent with price stability. The second channel is through global digital payments systems, which may compromise domestic policy sovereignty through effects on both monetary and financial stability.

Suggested Citation

  • Obstfeld, Maurice, 2021. "Two challenges from globalization," Journal of International Money and Finance, Elsevier, vol. 110(C).
    • Handle: RePEc:eee:jimfin:v:110:y:2021:i:c:s0261560620302576
    DOI: 10.1016/j.jimonfin.2020.102301
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    References listed on IDEAS

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    1. Maurice Obstfeld, 2020. "Global Dimensions of U.S. Monetary Policy," International Journal of Central Banking, International Journal of Central Banking, vol. 16(1), pages 73-132, February.
    2. Òscar Jordà & Alan M. Taylor, 2019. "Riders on the Storm," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
    3. Holston, Kathryn & Laubach, Thomas & Williams, John C., 2017. "Measuring the natural rate of interest: International trends and determinants," Journal of International Economics, Elsevier, vol. 108(S1), pages 59-75.
    4. Stern, Nicholas, 2015. "Why Are We Waiting? The Logic, Urgency, and Promise of Tackling Climate Change," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262029189, April.
    5. Maurice Obstfeld & Kenneth Rogoff, 2021. "Revisiting speculative hyperinflations in monetary models," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 40, pages 1-11, April.
    6. Lukasz Rachel & Thomas D. Smith, 2017. "Are Low Real Interest Rates Here to Stay?," International Journal of Central Banking, International Journal of Central Banking, vol. 13(3), pages 1-42, September.
    7. Boediono, 2017. "Revisiting the Problem of Development Distribution," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 53(2), pages 211-217, May.
    8. Ng, ManWo, 2017. "Revisiting a class of liner fleet deployment models," European Journal of Operational Research, Elsevier, vol. 257(3), pages 773-776.
    9. Mr. Tommaso Mancini-Griffoli & Maria Soledad Martinez Peria & Mr. Itai Agur & Mr. Anil Ari & Mr. John Kiff & Ms. Adina Popescu & Ms. Celine Rochon, 2018. "Casting Light on Central Bank Digital Currencies," IMF Staff Discussion Notes 2018/008, International Monetary Fund.
    10. Tommaso Mancini Griffoli & Maria Soledad Martinez Peria & Itai Agur & Anil Ari & John Kiff & Adina Popescu & Celine Rochon, 2018. "Casting Light on Central Bank Digital Currencies," IMF Staff Discussion Notes 18/08, International Monetary Fund.
    11. Vitor Gaspar & Mr. Maurice Obstfeld & Ms. Ratna Sahay & Mr. Douglas Laxton & Mr. Dennis P Botman & Kevin Clinton & Mr. Romain A Duval & Kotaro Ishi & Zoltan Jakab & Laura Jaramillo & Mr. Constant A Lo, 2016. "Macroeconomic Management When Policy Space is Constrained: A Comprehensive, Consistent and Coordinated Approach to Economic Policy," IMF Staff Discussion Notes 2016/009, International Monetary Fund.
    12. Vitor Gaspar & Maurice Obstfeld & Ratna Sahay & Douglas Laxton & Dennis P Botman & Kevin Clinton & Romain A Duval & Kotaro Ishi & Zoltan Jakab & Laura Jaramillo & Constant A Lonkeng Ngouana & Tommaso , 2016. "Macroeconomic Management When Policy Space is Constrained; A Comprehensive, Consistent and Coordinated Approach to Economic Policy," IMF Staff Discussion Notes 16/09, International Monetary Fund.
    13. ., 2017. "Trade and FDI revisited: the role of location," Chapters, in: The Development of International Business, chapter 5, pages 46-56, Edward Elgar Publishing.
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    Cited by:

    1. Ameen Omar Shareef & K.P. Prabheesh, 2022. "Does International Monetary Policy Influence The Bank Risk? Evidence From India," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 25(2), pages 135-154, August.
    2. Sofiane Aboura, 2022. "A note on the Bitcoin and Fed Funds rate," Empirical Economics, Springer, vol. 63(5), pages 2577-2603, November.
    3. Novi Maryaningsih & Suahasil Nazara & Febrio N. Kacaribu & Solikin M. Juhro, 2022. "Central Bank Digital Currency: What Factors Determine Its Adoption?," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 25(1), pages 1-24, June.

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