The financial crisis has prompted macroeconomists to think of new policy instruments that could help ensure financial stability. Policymakers are interested in understanding how these should be set in conjunction with monetary policy. We contribute to this debate by analyzing how monetary and...

Countries' concerns about the value of their currency have been studied and documented extensively in the literature. Capital controls can be—and often are—used as a tool to manage exchange rate fluctuations. This paper investigates whether countries can benefit from using such a tool. We...