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Currency Wars, Coordination, and Capital Controls

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  • Olivier Blanchard

Abstract

The strong monetary policy actions undertaken by advanced economies' central banks have led to complaints of “currency wars” by some emerging market economies, and to widespread demands for more macroeconomic policy coordination. This paper revisits these issues. It concludes that, while advanced economies' monetary policies indeed have had substantial spillover effects on emerging market economies, there was and still is little room for coordination. It then argues that restrictions on capital flows were and are a more natural instrument for advancing the objectives of both macro and financial stability.

Suggested Citation

  • Olivier Blanchard, 2016. "Currency Wars, Coordination, and Capital Controls," NBER Working Papers 22388, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:22388
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    References listed on IDEAS

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    1. Cerutti, Eugenio & Claessens, Stijn & Puy, Damien, 2019. "Push factors and capital flows to emerging markets: why knowing your lender matters more than fundamentals," Journal of International Economics, Elsevier, vol. 119(C), pages 133-149.
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    3. Marcel Fratzscher & Marco Lo Duca & Roland Straub, 2018. "On the International Spillovers of US Quantitative Easing," Economic Journal, Royal Economic Society, vol. 128(608), pages 330-377, February.
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    6. Koepke, Robin, 2014. "Fed Policy Expectations and Portfolio Flows to Emerging Markets," MPRA Paper 63519, University Library of Munich, Germany, revised 07 Apr 2015.
    7. Gilles Oudiz & Jeffrey Sachs, 1984. "Macroeconomic Policy Coordination among the Industrial Economies," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 15(1), pages 1-76.
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    More about this item

    JEL classification:

    • F3 - International Economics - - International Finance
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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