Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
You cannot have controlled exchange rates without controlling capital flow - that would render your monetary policy impotent. So if you have to either restrict capital flows or control the exchange rate, it has to be the former.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Jan 13th, 2009 at 05:10:22 AM EST
[ Parent ]
... if your monetary policy is to maintain a steeply discounted exchange rate, that is the easiest to maintain without support from capital controls.

OTOH, that is making maintenance of a stable exchange rate the overriding priority, irrespective of the state of domestic economic activity and financial markets, so it surely qualifies as a "hard" objective even under that qualifier.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Jan 13th, 2009 at 12:42:17 PM EST
[ Parent ]


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