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Policy trilemma-capital mobility for efficiency

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Reference no: EM13685507

Policymakers around the world often face what Obstfeld and Taylor dubbed a `policy trilemma':

1. They want capital mobility for efficiency and edibility purposes;

2. They want to fix the nominal exchange rate, in order to stabilize the price level;

3. They want to engage in active monetary policy for output stabilization purposes.

Reference no: EM13685507

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