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Economics

The Impossible Trinity in Open Economies

Quick fact

The trilemma was independently developed by Robert Mundell and Marcus Fleming in the 1960s, and it earned Mundell the 1999 Nobel Prize in Economics.

Why this is interesting

Imagine a country promising to keep its currency's value fixed while allowing money to flow freely across borders and trying to set its own interest rates. Can it have all three? Economists say no—why?