Pick two: a fixed exchange rate, free capital flows, or independent interest rates

Worked out by Robert Mundell and J. Marcus Fleming in the early 1960s, the impossible trinity says a country can have at most two of: a fixed exchange rate, free movement of capital, and an independent monetary policy — never all three at once. It explains why the Eurozone gave up independent interest rates, why China restricts capital flows to hold onto currency control, and why countries with open capital markets usually let their currency float.

— Robert Mundell and J. Marcus Fleming, Impossible trinity — Developed independently, early 1960s