Arab Monetary Fund Publications: Research and Studies

This paper aims to examine some policy options related to the trilemma using data for 17 Arab countries over the period 1970 to 2021. It employs the panel least square method to figure out the impact of policy options on GDP growth as a dependent variable along with other explanatory variables. Interestingly, the paper finds that one of the three policy trilemma options has a propensity to be effective. The analysis reveals that countries that are maintaining fixed exchange regime, free capital mobility, and monetary non-autonomy are more likely better off compared to other countries. The results also show that capital mobility usually yields better GDP growth compared to capital restrictions