Löffler, Axel; Schnabl, Gunther; Schobert, Franziska - 2013
that given buoyant capital inflows and exchange rate stabilization the absorption of surplus liquidity leads either to … financial repression, or rising inflation or both. Assuming that a debtor central bank moved towards a freely floating exchange … rate to gain monetary policy independence, we show that monetary policy independence is undermined by sterilization costs …