Malaysia And Its Impossible Trinity
Khoon, Goh Soo Malaysia And Its Impossible Trinity. Working Paper. Universiti Sains Malaysia. (Unpublished)
This paper discusses how Malaysia manages the impossible trinity, the conjecture that a country cannot simultaneously maintain an open capital account, exchange rate stability and an independent monetary policy. Only two out of these three goals can be mutually consistent and policy makers have to decide which third goal to give up. The paper shows how Malaysia adopts an intermediate regime - a regime that enables policy makers to manage all the three goals simultaneously.
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