The Impossible Trinity» rule in the context of international experience

In: Российский экономический журнал, Heft 3, S. 90-96

Abstract

The article is devoted to the «Trilemma» of the policy of the monetary authorities, or the «rule of impossible trinity». This policy compatibility rule, formulated more than 50 years ago, remains relevant today. Its reliability is generally confirmed by a number of empirical studies, although there are also suggestions on the need to adjust this economic and theoretical development. The corresponding discussion also affects the policy of the Bank of Russia (mega-regulator), which carries out inflation targeting in conditions of the free movement of cross-border capital and the use of a floating ruble exchange rate. Regarding the effectiveness of this policy, carried out in the presence of increased sensitivity of the Russian economy to external shocks, the authors express certain doubts.