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Suppose, Under Fixed Exchange Rates, You Find Evidence of Sterilization

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Suppose, under fixed exchange rates, you find evidence of sterilization. What does it mean regarding the ability of central banks to follow independent monetary policies? What does sterilization imply regarding the causality between domestic credit and reserve flows under fixed exchange rates?


Definitions:

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A fatal genetic neurological disorder.

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A chromosomal disorder in females characterized by the partial or complete absence of one X chromosome, leading to various developmental issues.

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A male sex hormone produced mainly by the testes.

Dominant Gene

A gene that is expressed in the phenotype over a recessive gene when they are paired together.

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