Dealing with the Trilemma: Optimal Capital Controls with Fixed Exchange Rates

By Emmanuel Farhi, I. Werning. 2012

225 citations recorded by the source corpus.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/ad10b0091e6e39ac205b29efcc901a3ee9640bd9

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Citations in the corpus

A Theory of Macroprudential Policies in the Presence of Nominal Rigidities (2013, background): “Caballero and Krishnamurthy (2001); Lorenzoni (2008); Farhi et al. (2009); Bianchi and Mendoza (2010); Jeanne and Korinek (2010); Bianchi (2011); Korinek (2011); Davilla (2011); Stein (2012); Korinek (2012a,b); Jeanne and Korinek (2013). Woodford (2011) studies a model with nominal rigidities and pe”
Capital controls and optimal Chinese monetary policy (2015, background): “Farhi and Werning (2012) also argue that capital controls can mitigate the effects of excess international capital movements caused by risk premium shocks.”
Downward Nominal Wage Rigidity, Currency Pegs, and Involuntary Unemployment (2016, unknown): “In a recent related paper, Farhi and Werning (2012) study capital controls in the context of a perfect-foresight, linearized version of the Gal í and Monacelli (2005) sticky-price model.”
Optimal Time-Consistent Macroprudential Policy (2017, unknown): “In particular, Schmitt-Grohé and Uribe (2014) and Farhi and Werning (2012) examine the use of prudential capital controls as a tool for smoothing aggregate demand in the presence of nominal”
Rounding the Corners of the Policy Trilemma: Sources of Monetary Policy Autonomy (2015, unknown): “This, in principle, is the monetary autonomy Farhi and Werning (2012) or Schmitt Grohe and Uribe (2012) have in mind.2 One complication is that we do not directly observe the expected change in the exchange rate or the risk premium.”
A Theory of Foreign Exchange Interventions (2020, background): “5 Indeed, two of our alternative models share common themes with Farhi and Werning (2012, 2014) but allow for limited capital mobility. We show that their prescription that the optimal policy should lean against the wind after world interest rate shocks, stabilizing movements in the real exchange ra”
Capital Flows and Financial Stability: Monetary Policy and Macroprudential Responses (2011, unknown): “Following Gaĺı and Monacelli (2005), Faia and Monacelli (2007), and De Paoli (2009), among many others, we assume that the domestic economy is very small in size relative to the rest of the world to characterize an emerging, open-economy case.”
Exchange Rate Disconnect in General Equilibrium (2017, unknown): “3 Exogenous UIP shocks are commonly used in the international macro literature (see, e.g., Devereux and Engel 2002; Kollmann 2005; Farhi and Werning 2012) and can be viewed to emerge from exogenous asset demand, as in the literature following Kouri (1976, 1983).”
Optimal Capital Controls and Real Exchange Rate Policies: A Pecuniary Externality Perspective (2015, unknown): “In an economy dened by (1), (4), (22) and (23) with a tax on nontradable consumption t as the government policy instrument, there exists a policy for N t that decentralizes the unconstrained allocation.”