maiakee on Nostr: The Impossible Trinity (Trilemma) in economics states that a country cannot achieve ...
The Impossible Trinity (Trilemma) in economics states that a country cannot achieve all three of the following goals at the same time:
1. Free Capital Flow – Unrestricted movement of capital across borders.
2. Fixed Exchange Rate – A stable currency value relative to others.
3. Independent Monetary Policy – Control over interest rates and money supply.
A country can only achieve two of these three goals simultaneously. For example:
• If a country wants free capital flow and an independent monetary policy, its exchange rate must float.
• If it wants free capital flow and a fixed exchange rate, it must give up an independent monetary policy.
• If it wants independent monetary policy and a fixed exchange rate, it must impose capital controls.
This highlights the trade-offs in managing economic policies in a globalized economy.
#Siamstr #btc #bitcoin #nostr
Published at
2024-12-06 12:37:13Event JSON
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"content": "https://image.nostr.build/5ddd2d7a14408570a94819940456622b4dd1186cc7658542eca43b93e83d3f05.jpg\n\nThe Impossible Trinity (Trilemma) in economics states that a country cannot achieve all three of the following goals at the same time:\n 1. Free Capital Flow – Unrestricted movement of capital across borders.\n 2. Fixed Exchange Rate – A stable currency value relative to others.\n 3. Independent Monetary Policy – Control over interest rates and money supply.\n\nA country can only achieve two of these three goals simultaneously. For example:\n • If a country wants free capital flow and an independent monetary policy, its exchange rate must float.\n • If it wants free capital flow and a fixed exchange rate, it must give up an independent monetary policy.\n • If it wants independent monetary policy and a fixed exchange rate, it must impose capital controls.\n\nThis highlights the trade-offs in managing economic policies in a globalized economy.\n\n#Siamstr #btc #bitcoin #nostr",
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