The Impossible Trinity or "The Trilemma", in which two policy positions are possible. If a nation were to adopt position a, for example, then it would maintain a fixed exchange rate and allow free capital flows, the consequence of which would be loss of monetary sovereignty.
The impossible trinity (also known as the impossible trilemma, the monetary trilemma or the Unholy Trinity) is a concept in international economics and international political economy which states that it is impossible to have all three of the following at the same time:
a fixed foreign exchange rate
free capital movement (absence of capital controls)
an independent monetary policy
It is both a hypothesis based on the uncovered interest rate parity condition, and a finding from empirical studies where governments that have tried to simultaneously pursue all three goals have failed. The concept was developed independently by both John Marcus Fleming in 1962 and Robert Alexander Mundell in different articles between 1960 and 1963.[1]
Historically in advanced economies, the periods pre-1914 and 1970–2014 were characterized by stable foreign exchange rates and free capital movement, whereas monetary autonomy was limited. The periods 1914–1924 and 1950–1969 had restrictions on capital movement (e.g. capital controls), but exchange rate stability and monetary autonomy were present.[2][3]
^Boughton, James M. (2003). "On the Origins of the Fleming-Mundell Model" (PDF). IMF Staff Papers. 50 (1): 1–3. doi:10.5089/9781451852998.001. Retrieved 17 April 2019.
^Eichengreen, Barry; Esteves, Rui Pedro (2021), Fukao, Kyoji; Broadberry, Stephen (eds.), "International Finance", The Cambridge Economic History of the Modern World: Volume 2: 1870 to the Present, vol. 2, Cambridge University Press, pp. 501–525, ISBN 978-1-107-15948-8
^Broz, J. Lawrence; Frieden, Jeffry A. (2001). "The Political Economy of International Monetary Relations"". Annual Review of Political Science. 4 (1): 317–343. doi:10.1146/annurev.polisci.4.1.317. ISSN 1094-2939.
and 26 Related for: Impossible trinity information
The impossibletrinity (also known as the impossible trilemma, the monetary trilemma or the Unholy Trinity) is a concept in international economics and...
Unholy Trinity may refer to: Impossibletrinity or unholy trinity, a concept in international economics The unholy trinity in John Milton's Paradise Lost...
1949 book, Unions and Capitalism. In 1962 and 1963, a trilemma (or "impossibletrinity") was introduced by the economists Robert Mundell and Marcus Fleming...
sometimes discussed in relation to the impossibletrinity (trilemma, the unholy trinity), the finding that its impossible for a nation's economic policy to...
the "Holy Trinity" of price stability, financial stability and sovereign debt sustainability as against Mundell's well known "impossibletrinity" of a fixed...
an extension of the IS–LM Model to an open economy, proposing the ImpossibleTrinity of fixed exchange rate, free capital movement, and an independent...
Triffin dilemma Petrodollar recycling United States Bullion Depository Impossibletrinity To compare over the period from 1950–2013 from the same Bureau of...
international finance is the impossibletrinity, derived from the Mundell–Fleming model, which holds that it is impossible to simultaneously pursue all...
maintained by the IMF Triffin dilemma – Conflict of economic interests Impossibletrinity – Trilemma in international economics "The Retirement of Sterling...
York Times. May 3, 2010. The Trilemma of a Monetary Union: Another ImpossibleTrinity Hanno Beck, Aloys Prinz, Intereconomics Review of European Economic...
exchange rate regime and other factors. This is known as trilemma or impossibletrinity. Hence, in a world of perfect capital mobility, a country with fixed...
Woods system Dollar hegemony Exorbitant privilege Reserve currency Impossibletrinity (trilemma) While named for Triffin, "(...) a virtually identical warning...
union Black Wednesday Capital control Convertibility Currency board Impossibletrinity Speculative attack Swan diagram Dornbusch, Rüdiger; Fisher, Stanley;...
integration. Rodrik first presented the trilemma in a 2000 paper. Impossibletrinity "Why governments can't have it all". www.ft.com. 2017. Retrieved 2021-07-24...
sight. The anecdote means the impossibility for the finite human mind to know deeply the faith mystery of the Most Holy Trinity. The anecdote became a popular...
rate regimes. Three, potentially desirable policies, are called "impossibletrinity" because a country could not achieve all three at the same time. fixed...
made a £2.4 billion profit on sterling's devaluation. 1990s portal Impossibletrinity – Trilemma in international economics 1999–2002 sale of United Kingdom...
brother embezzled $300m from the Banque du Liban between 2002 and 2015. Impossibletrinity List of stock market crashes and bear markets Currency crisis Government...
need capital controls in place—due to conditions that arise from the impossibletrinity trilemma. Quantitative easing (QE) is the practice in which a central...
The Trinity is most commonly seen in Christian art with the Holy Spirit represented by a dove, as specified in the gospel accounts of the baptism of Christ;...
Anticipating the trilemma that would later be formulated as the impossibletrinity, John Maynard Keynes and Harry Dexter White argued that freedom of...
exchange rate; Nixon's dilemma has been cited as an example of the Impossibletrinity in international economics. He then announced temporary wage and price...
the glassy residue left on the desert floor after the plutonium-based Trinity nuclear bomb test on July 16, 1945, near Alamogordo, New Mexico. The glass...
There are two different types of Holy Trinity icons: the Old Testament Trinity and the New Testament Trinity (Троица Ветхозаветная and Троица Новозаветная...
impossible to exercise as they believe the trinity doctrine had not yet been developed. For example, the Encyclopedia Britannica says of the trinity "The...
Global Information