Small country. Large forces. A space of outcomes.
The IS and LM curves you're about to move were already old news by the 1960s โ the missing piece was the third one, BP: what happens to a small economy once money and goods can cross its borders. Robert Mundell and J. Marcus Fleming worked this out independently in the early 1960s, and together it's called the Mundell-Fleming model โ the namesake of this entire project.
Their real result is what's now known as the "impossible trinity": a country can hold onto any two of free capital movement, a fixed exchange rate, and independent monetary policy โ but never all three at once. Try the sliders above with capital mobility (k) at 1 versus near 0, and you're watching that exact trade-off play out live, not a metaphor for it. Mundell went on to win the Nobel Memorial Prize in Economics in 1999, largely for this work and its role in the theory behind the Euro.
Goods market meets money market meets balance of payments. Move a slider or press a scenario โ watch the equilibrium slide.
General education only. Nothing here is personal financial advice or takes into account your objectives, financial situation or needs. Past performance is not a guarantee of future results.