The Trilemma (Obstfeld, Shambaugh & Taylor)

“Financial Stability, the Trilemma, and International Reserves” by Maurice Obstfeld, Jay C. Shambaugh and Alan M. Taylor. The Trilemma (difficult trade-off policy makers face to choose between a fixed exchange rate regime, an independent monetary policy, and an open capital account) is one of his major findings and contributions to the economic literature and our profession. It is usually referred as the Obstfeld’s trilemma. Recomended by Alvaro Manoel.