Financial instability has increased for many economies in the face of greater capital mobility. Eliminating capital flows, especially portfolio investment flows, may reduce volatility, but it could also result in domestic capital constraints. To overcome this dilemma, policymakers may consider...

Central banks are viewed by the general public as reputable institutions, a perception bolstered by economic theory and modeling. By extension, central bankers are thought of as benevolent, as decent men and women attempting to maximize societal welfare through their decisions. Yet, cases of...