Currency Wars, Coordination, and Capital Controls

23 Pages Posted: 11 Jul 2016

See all articles by Olivier J. Blanchard

Olivier J. Blanchard

National Bureau of Economic Research (NBER); Peter G. Peterson Institute for International Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 2016

Abstract

The strong monetary policy actions undertaken by advanced economies' central banks have led to complaints of “currency wars” by some emerging market economies, and to widespread demands for more macroeconomic policy coordination. This paper revisits these issues. It concludes that, while advanced economies' monetary policies indeed have had substantial spillover effects on emerging market economies, there was and still is little room for coordination. It then argues that restrictions on capital flows were and are a more natural instrument for advancing the objectives of both macro and financial stability.

Suggested Citation

Blanchard, Olivier J., Currency Wars, Coordination, and Capital Controls (July 2016). NBER Working Paper No. w22388. Available at SSRN: https://ssrn.com/abstract=2807699

Olivier J. Blanchard (Contact Author)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

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