Political fallacies about globalisation It’s often said that globalisation undermines national sovereignty and democracy. A more sophisticated version of this popular claim appears in academic discussions about the “political trilemma of the world economy”.
The European Monetary System was incompatible with both the openness of economies within a single market and the existence of national monetary policies. Indeed, even when monetary policies were aligned, the lack of confidence over this trilemma could give rise to exchange rate fluctuations.