Impossible Trinity in Era of Financial Globalization

DOI: 10.20542/0131-2227-2012-5-3-14

Yu. Shishkov, Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO RAN), 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation (

Abstract. From the latter half of 1980s, an extensive shift in internationalization of financial sector started in the world economy. At that time, many financial operations lost touch with their original facility and began to run wild, far advancing the development of national and world commodity and services markets. The fundamental reason for such advance lies in the fact that the international capital migration allows its owners to increase revenues much easier and faster than the international trade. The rapid development of electronic telecommunications facility, which helps in performing financial operations in real-time mode and regardless of distance, plays in favor. That's why globalization in this sphere occurs much more actively than in the production of goods and services. In the estimation of experts, daily transactions on world currency, loan and financial markets 50 times exceed world goods trade dealings in costs.

Keywords: “impossible trinity”, financial globalization, international capital markets, world currency market, currency policy, exchange rate, monetary policy

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For citation:
Shishkov Y. Impossible Trinity in Era of Financial Globalization. World Eonomy and International Relations, 2012, no. 5, pp. 3-14.

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