The Trilemma in History: Tradeoffs among Exchange Rates, Monetary Policies, and Capital Mobility

The exchange-rate regime is often seen as constrained by the monetary policy trilemma, which imposes a stark tradeoff among exchange stability, monetary independence, and capital market openness. Yet the trilemma has not gone without challenge. Some (e.g., Calvo and Reinhart 2001, 2002) argue that under the modern float there could be limited monetary autonomy. Others (e.g., Bordo and Flandreau 2003), that even under the classical gold standard domestic monetary autonomy was considerable. This paper studies the coherence of international interest rates over more than 130 years. The constraints implied by the trilemma are largely borne out by history.

Monetary Sovereignty, Exchange Rates, and Capital Controls: The Trilemma in the Interwar Period

The interwar period was marked by the end of the classical gold standard regime and new levels of macroeconomic disorder in the world economy. The interwar disorder often is linked to policies inconsistent with the constraint of the open-economy trilemmathe inability of policymakers simultaneously to pursue a fixed exchange rate, open capital markets, and autonomous monetary policy. The first two objectives were linchpins of the pre-1914 order. As increasingly democratic polities faced pressures to engage in domestic macroeconomic management, however, either currency pegs or freedom of capital movements had to yield. This historical analytic narrative is compellingwith significant ramifications for today's world, if truebut empirically controversial. We apply theory and empirics to the interwar data and find strong support for the logic of the trilemma. Thus, an inability to pursue consistent policies in a rapidly changing political and economic environment appears central to an understanding of the interwar crises, and the same constraints still apply today.

Monetary Sovereignty, Exchange Rates, and Capital Controls: The Trilemma in the Interwar period

The interwar period was marked by the end of the classical gold standard regime and new levels of macroeconomic disorder in the world economy. The interwar disorder often is linked to policies inconsistent with the constraint of the open-economy trilemma the inability of policymakers simultaneously to pursue a fixed exchange rate, open capital markets, and autonomous monetary policy. The first two objectives were linchpins of the pre-1914 order. As increasingly democratic polities faced pressures to engage in domestic macroeconomic management, however, either currency pegs or freedom of capital movements had to yield. This historical analytic narrative is compelling with significant ramifications for today's world, if true but empirically controversial. We apply theory and empirics to the interwar data and find strong support for the logic of the trilemma. Thus, an inability to pursue consistent policies in a rapidly changing political and economic environment appears central to an understanding of the interwar crises, and the same constraints still apply today.

Identification of the proteins, including MAGEG1, that make up the human SMC5-6 protein complex

The SMC protein complexes play important roles in chromosome dynamics. The function of the SMC5-6 complex remains unclear, though it is involved in resolution of different DNA structures by recombination. We have now identified and characterized the four non-SMC components of the human complex and in particular demonstrated that the MAGEG1 protein is part of this complex. MAGE proteins play important but as yet undefined roles in carcinogenesis, apoptosis, and brain development. We show that, with the exception of the SUMO ligase hMMS21/hNSE2, depletion of any of the components results in degradation of all the other components. Depletion also confers sensitivity to methyl methanesulfonate. Several of the components are modified by sumoylation and ubiquitination

Financial Stability, the Trilemma, and International Reserves

The rapid growth of international reserves, a development concentrated in the emerging markets, remains a puzzle. In this paper, we suggest that a model based on financial stability and financial openness goes far toward explaining reserve holdings in the modern era of globalized capital markets. The size of domestic financial liabilities that could potentially be converted into foreign currency (M2), financial openness, the ability to access foreign currency through debt markets, and exchange rate policy are all significant predictors of reserve stocks. Our empirical financial-stability model seems to outperform both traditional models and recent explanations based on external short-term debt

Weapon Size Versus Body Size as a Predictor of Winning in Fights Between Shore Crabs, Carcinus maenas (L.)

Relative body size (carapace width) and weapon size (chela length) were used as indicators of resource holding potential (RHP) in the agonistic behaviour of male shore crabs, Carcinus maenas (L.). Weapon size was found to be a more reliable predictor of the outcome of pairwise fights than body size. Crabs with longer chelae than their opponents were more likely to win fights than crabs with relatively larger bodies. Body size had less influence on the outcome of fights. Relative body and weapon size did not influence initiation of contests but did affect the likelihood of winning; however, this was significant only for weapon size. Winning crabs had heavier claws with greater surface area than losing crabs. There was no relationship between relative size and fight duration. The frequency of cheliped display increased with chela length and winners performed significantly more displays than losers

Understanding Financial Literacy and Competence: Considerations for Training, Collaboration, and Referral for MFTs

Developing clinical competencies is a foundational feature for most mental health disciplines. Evidence suggests that many couples attending marital therapy regularly report that financial concerns are a significant contributor to their collective distress. Despite the reports of financial distress being a common occurrence, many practitioners are unfamiliar with available resources to remediate the problem. The authors address the concepts of practitioner competence in financial literacy, client financial problems, the benefits of financial literacy, and suggest a referral process, grounded in ethical decision making, that provides appropriate treatment considerations to clients experiencing such distress. The Referral for Financial Concerns Questionnaire (RFCQ) and the Personal & Relationship Financial Assessment Tool (PREFAT) are introduced. Finally, the authors provide suggestions for professional collaboration between mental health practitioners, financial planners, and financial counselors

Financial Stability, the Trilemma, and International Reserves

The rapid growth of international reserves---a development concentrated in the emerging markets---remains a puzzle. In this paper we suggest that a model based on financial stability and financial openness goes far toward explaining reserve holdings in the modern era of globalized capital markets. The size of domestic financial liabilities that could potentially be converted into foreign currency (M2), financial openness, the ability to access foreign currency through debt markets, and exchange rate policy are all significant predictors of reserve stocks. Our empirical financial-stability model seems to outperform both traditional models and recent explanations based on external short-term debt.

Financial Instability, Reserves, and Central Bank Swap Lines in the Panic of 2008

In this paper we connect the events of the last twelve months, "The Panic of 2008" as it has been called, to the demand for international reserves. In previous work, we have shown that international reserve demand can be rationalized by a central bank's desire to backstop the broad money supply to avert the possibility of an internal/external double drain (a bank run combined with capital flight). Thus, simply looking at trade or short-term debt as motivations for reserve holdings is insufficient; one must also consider the size of the banking system (M2). Here, we show that a country's reserve holdings just before the current crisis, relative to their predicted holdings based on these financial motives, can significantly predict exchange rate movements of both emerging and advanced countries in 2008. Countries with large war chests did not depreciate -- and some appreciated. Meanwhile, those who held insufficient reserves based on our metric were likely to depreciate. Current account balances and short-term debt levels are not statistically significant predictors of depreciation once reserve levels are taken into account. Our model's typically high predicted reserve levels provide important context for the unprecedented U.S. dollar swap lines recently provided to many countries by the Federal Reserve.