International Channels of Transmission of Monetary Policy and the Mundellian Trilemma*

Rey, H
Date Published: 2016   Latest Draft: 21 Dec 2015, Mundell Fleming Lecture 2014, IMF Economic Review. Link to the video.

Abstract:
This lecture argues that the Global Financial Cycle is a challenge for the validity of the Mundellian trilemma. I present evidence that US monetary policy shocks are transmitted internationally and affect financial conditions even in inflation targeting economies with large financial markets. Hence flexible exchange rates are not enough to guarantee monetary autonomy in a world of large capital flows.



Citation:
Rey, H. International Channels of Transmission of Monetary Policy and the Mundellian Trilemma, IMF Econ Rev (2016) 64: 6. https://doi.org/10.1057/imfer.2016.4 Download BibTex citation

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This material is based upon work supported by the European Research Council grant number 210584 on "Countries' external balance sheets, dynamics of international adjustment and capital flows".

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NBER wp11027, CEPR DP21852.
 

• Helene Rey’s Mundell Fleming Lecture: November 2014 (video)

http://www.imf.org/external/np/res/seminars/2014/arc/
 

• Ben Bernanke’s Mundell Fleming Lecture: November 2015 (video)

http://www.imf.org/external/mmedia/view.aspx?vid=4598935280001
 



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