Donald Trump and Dani Rodrik's trilemma

Trump's economic policy objectives have given new life to the issues raised by the economist

A decade back, economist Dani Rodrik described democracy, national sovereignty and global integration as an “inescapable trilemma” of the 21st century political economy. Much earlier, in 1962, another economist, Robert Mundell, had argued that fixed exchange rates, an independent monetary policy and a liberal capital account form an “impossible trinity”, which also implies loss of sovereignty in macroeconomic policies. Since the election of Donald Trump as US President, and his declared economic policy objectives, the issues raised by Rodrik have found new life.

The substance of the “inescapable trilemma” is best summarised in Rodrik’s recent web blog. His worry is