Impossible Trinity

The impossible trinity (trilemma) says a country cannot simultaneously have a fixed exchange rate, free capital mobility, and an independent monetary policy — it must drop one.

Definition

The impossible trinity (trilemma) says a country cannot simultaneously have a fixed exchange rate, free capital mobility, and an independent monetary policy — it must drop one.

Same category · EconomicsComparative Advantage Crowding Out Dutch Disease Externality Gresham's Law Hysteresis Liquidity Trap Money Supply Moral Hazard NAIRU Okun's Law Opportunity Cost

TagsMundell-Fleming trilemma capital mobility

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