Is Malaysia exempted from the impossible trinity? An empirical analysis for an emerging market

Ewe, Ghee Lim and Soo, Khoon Goh (2016) Is Malaysia exempted from the impossible trinity? An empirical analysis for an emerging market. Macroeconomics and Finance in Emerging Market Economies. ISSN 1752-0843 (Print) 1752-0851 (Online)

Full text not available from this repository.

Abstract

This paper estimates offset and sterilization coefficients in Malaysia with the objective to assess the relevance of the Impossible Trinity for policy. The paper finds that Malaysia had scope for independent monetary policy in the short run; but in the longer run only under managed floating or capital controls. The loss of long-run monetary autonomy under peg/open capital was in line with the trinity, and may be one reason the peg was eventually abandoned for managed floating in year 2005. The results suggest that managed floating with sterilizations could be a viable monetary strategy for emerging markets facing volatile capital flows.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory > HB172.5 - Macroeconomics
H Social Sciences > HG Finance > HG1-9999 Finance
Divisions: Pusat Penyelidikan Dasar & Kajian Antarabangsa (Centre for Policy Research and International Studies CenPRIS)
Depositing User: Administrator Automasi
Date Deposited: 19 May 2016 15:14
Last Modified: 19 May 2016 15:15
URI: http://eprints.usm.my/id/eprint/30065

Actions (login required)

View Item
Share