Current Issues in the Design and Conduct of Monetary Policy

Author/Editor:

Mohsin S. Khan

Publication Date:

March 1, 2003

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Movements in global capital during the late 1990s and the greater emphasis on price stability led many countries to abandon fixed exchange rate regimes and to design institutions and monetary policies to achieve credibility in the goal of lowering inflation. Such recent developments have brought to the forefront the idea that freely mobile capital, independent monetary policy, and fixed exchange rates form an "impossible trinity." It is possible to have two of these policies, but not all three. Inflation-targeting regimes being adopted by many countries provide a way of resolving this dilemma.

Series:

Working Paper No. 03/56

Subject:

English

Publication Date:

March 1, 2003

ISBN/ISSN:

9781451847727/1018-5941

Stock No:

WPIEA0562003

Format:

Paper

Pages:

18

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