A Brief Discussion of the Effectiveness of Monetary Policy in a Fixed Exchange Rate System With Perfect Capital Mobility and an Analysis of the “Impossible Trinity” Thesis

Authors

  • Carlos Aviña Universidad de Guadalajara

DOI:

https://doi.org/10.32870/eera.vi13.799

Keywords:

efectivenesss, monetary policy, capital mobility

Abstract

The purpose of this essay is to discuss the effectiveness of monetary policy in a fixed exchange rate system with perfect capital mobility and an analysis of the Impossible Trinity thesis, with the IS-LM-BP framework.

Section 1 analyses the implications of capital mobility. Section 2 explains the IS-LM model framework. Section 3 analyse the balance of payments. Section 4 discusses the relationship between the balance of payments and the monetary accounts. Section 5 discusses the implications of monetary policy with perfect capital mobility. Section 6 discusses the monetary policy effectiveness and conclusions.

Author Biography

Carlos Aviña, Universidad de Guadalajara

Profesor del Departamento de Finanzas, CUCEA, Universidad de Guadalajara.

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Published

2004-06-01

Issue

No. 13 (2004): EXPRESIÓN ECONÓMICA 13, JULIO-DICIEMBRE 2004

Section

Articles

License

Copyright (c) 2016 University of Guadalajara

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.