Currency Wars, Coordination, and Capital Controls
by Olivier Blanchard
Petersen Institute for International Economics
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
JEL Codes: F3, F36, F42.
Full article (PDF, 26 pages, 771 kb)