The irony of the Mundell-Fleming equilibrium model is that it showed
that there was no equilibrium possible! A capitalist economy cannot
simultaneously maintain a stable or fixed exchange rate with other
currencies, as well as free movement of capital across borders and then
expect that monetary policy can be used to control the level of interest
rates and the money supply in one economy. Mundell-Fleming found that an
economy can only maintain two of the three options at the same time.
This principle is frequently called the “Mundell–Flemingtrilemma
<https://en.wikipedia.org/wiki/Trilemma>.”
For Marxist economics, this result is no surprise because capitalist
economies do not tend to equilibrium as the neoclassical mainstream
religiously believes. Capitalist economies, as they accumulate, tend to
disequilibrium because of the anarchy of capitalist competition and the
uneven development of capitals seeking profit. So any attempt to
control one aspect of that disequilbrium will only increase
disequilbrium elsewhere. If you have a bucket with three holes and only
two stoppers, it just leaks faster out of the hole without one.
https://thenextrecession.wordpress.com/2021/04/10/robert-mundell-nothing-optimal/
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