Pick any two: 1. fixed (or managed) exchange rates 2. independent monetary policy 3. free flow of capital Most countries pick 2, 3, not 1, and thus have flo

Pick any two: 1. fixed (or managed) exchange rates 2. independent monetary policy 3. free flow of capital Most countries pick 2, 3, not 1, and thus have floating exchange rates. Countries within the Euro area, Hong Kong pick 1, 3, not 2, and thus have limited influence on monetary policy. China, Argentina pick 1, 2, not 3, and thus impose capital controls.