I came across this Milton Friedman speech where he talks about howe Canada has gained from flexible exchange rates.
At the end Michael Bordo asks him a q on Euro:
Archive for December 22nd, 2010
Friedman on Euro
December 22, 2010The Inequality that matters
December 22, 2010This is the title of an article/paper by Tyler Cowen. He throws light on the matter in typical Cowen style. He says much of the inequality fears are bogus but some issues deserve more attention that they are getting (Wall Street risky behavior).
How has India managed the impossible trinity over the years?
December 22, 2010Michael Hutchison, Rajeswari Sengupta and Nirvikar Singh have written this amazing paper (see the ppt for a quicker understanding).
They develop an impossible trinity index for India and see how it has moved/changed over the years. Impossible Trinity means one cannot manage exchange rates, price stability and capital account openness together. One has to give up one of the objectives and there is a trade-off. Read this superb paper from Joshua Aizenamann to understand the trade-offs. Also my two attempts to explain the idea from an Asian and Indian perspective.
Coming back to the paper. So what the authors do is track these trilemma variables over a period of time. In sum, the authors measure tradeoff between financial integration, exchange rate stability and monetary independence in India.
The hypothesis is as India has opened up over the years, one should see either loss of monetary independence or loss of exchange rate stability. And this indeed is the case.
Mostly Economics 
