- Title
- Can Central Banks circumvent the impossible trinity within their operational frameworks? Theory and evidence
- Creator
- Pantelopoulos, George
- Relation
- The World Economy Vol. 44, Issue 7, p. 2041-2075
- Publisher Link
- http://dx.doi.org/10.1111/twec.13154
- Publisher
- Wiley-Blackwell Publishing
- Resource Type
- journal article
- Date
- 2021
- Description
- Central Bank operational frameworks can be challenged during times of severe financial stress. Typical of such an instance is where policymakers attempt to heavily manage or fix a domestic exchange rate whilst faced with balance of payments pressures. However, it is claimed to be impossible for policymakers to achieve both monetary independence and exchange rate stability if the domestic economy were to post a balance of payment surplus, otherwise known as the ‘impossible trinity’. The purpose of this paper is to investigate the European Monetary System crisis through the lens of Institutional Practice, that is the day-to-day operations of key institutions, such as the Central Bank, Treasury and commercial banks, with a view to demonstrate why global imbalances are able to occur and persist across the international monetary system. Through both a theoretical and an empirical appraisal, this paper shows how Central Banks in economies with a balance of payments surplus can circumvent the binding constraints of the trinity within their operational frameworks.
- Subject
- correspondent banking; global imbalances; impossible trinity; SDG 10; Sustainable Development Goals
- Identifier
- http://hdl.handle.net/1959.13/1446475
- Identifier
- uon:42880
- Identifier
- ISSN:0378-5920
- Rights
- This is the peer reviewed version of the following article Pantelopoulos, George. "Can Central Banks circumvent the impossible trinity within their operational frameworks? Theory and evidence". The World Economy Vol. 44, Issue 7, p. 2041-2075 (2021), which has been published in final form at http://dx.doi.org/10.1111/twec.13154. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
- Language
- eng
- Full Text
- Reviewed
- Hits: 728
- Visitors: 540
- Downloads: 49
Collections
Goal 10: Reduced Inequalities
| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | ATTACHMENT02 | Author final version | 1 MB | Adobe Acrobat PDF | View Details Download |