Stabilization Policies in Open Economies / Richard C. Marston.

Format:

Book

Author/Creator:

Marston, Richard C.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w1117.

NBER working paper series no. w1117

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1983.

Summary:

This study analyzes the theory of stabilization policy as it has developed from the trade oriented models of the 1950's to the recent models employing rational expectations. Throughout the study one model is presented with appropriate modifications to take into account international capital mobility, wage flexibility, and rational expectations. The Mundell-Fleming model is presented but with an asset sector based on modern portfolio theory. This same model is analyzed under conditions of full wage and price flexibility, and the propositions associated with the monetary approach to the balance of payments and the exchange rate are discussed. A simplified version of the model is then used to examine the policy ineffectiveness propositions of the new classical economics (as applied to open economies). The study concludes with a brief review of the literature on the choice between exchange rate regimes.

Notes:

Print version record

May 1983.