Capital Flows and Monetary Policy

Number: 
395
Published: 
Classification JEL: 
F41, F32, G15, H62, H63
Keywords: 
Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy

Capital inflows and outflows often remind policymakers of the monetary policy "trilemma" and the several associated dilemmas. To tackle these dilemmas, an equilibrium model of capital flows is proposed. The model captures bouts of capital inflows and outf