● John Marcus Fleming’s and Robert Alexander Mundell’s “impossible trinity”, better known as the “trilemma,” presents a poignant picture for most monetary policymakers.
● The concept stipulates that a country cannot have:
1. Free capital flow (no capital controls),
2. A fixed/stable exchange rate, and
3. Independent monetary policy,
All at the same time.
● An able policymaker can, at best, achieve two of these three objectives at any given time.
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