We assess the empirical validity of the trilemma (or impossible trinity) in the 2000s for a large sample of advanced and emerging economies. To do so, we estimate Taylor-rule type monetary policy reaction functions, relating the local policy rate to real-time forecasts of domestic fundamentals,...

The effectiveness of different exchange rate systems continues to attract the attention of many scholars, however, most discussions on exchange rate regimes have focused on how the phenomenon affects economic growth, economic stability, financial crises, international tourism, and international...