All analysis of the international monetary system begins with the trilemma (the impossible trinity): Is it still valid?

Discussion on the organisation of the international monetary system is often guided by the trilemma (the impossible trinity ). The trilemma says that of three choices - fixed exchange rate, perfect capital mobility (absence of capital controls ) and independent monetary policy - only two can be chosen . The most common c ombination today is perfect capital mobility and an independent monetary policy , which requires exchange rates to be flexible. But the merits of this choice are the subject of debate . While it makes it possible to obtain low variability in growth and inflation, since monetary policy has domestic objectives (stab ilisation of production and inflation), does it not lead to excessive variability in exchange rates? It is argued that this variability result s in particular from the abundance of available liquidity , which can be invested in different currencies and therefore move from one currency to another , hence the growing size of international capital flows . Perhaps a different choice is then needed : capital controls and a monetary policy objective of exchange-rate stability (but potentially leading to excessive variability in growth and inflation).