文档介绍：Intermediate Macroeconomics
Lecture 15
The Open Economy in the SR
The Mundell-Fleming Model
Model under a floating ex-rate
Model under a fixed ex-rate
Interest-rate differentials
Debate over floating . fixed ex-rate
Mundell-Fleming model with changing price level
Model in large open economy
The Mundell-Fleming model
Robert A. Mundell
1999 Nobel Price in Economics
ary & fiscal policy under different ex-rate regimes
Optimal currency area
Other contribution:
Mundell-Tobin effect
International trade
The Mundell-Fleming Model
Crucial assumption: SOE r = r*
Components of the model
Y = C (Y-T) + I (r*) + G + NX (e)
M/P=L (r, Y)
r = r*
The Mundell-Fleming Model
The model on a Y --- r graph
r
Y
IS (e)
LM
r = r*
The Mundell-Fleming Model
IS curve and ex-rate
(IS curve is drawn for a given ex-rate)
Ex-rate↑ domestic currency____
IM ___ & EX ___ (NX__)
IS shifts _____
Y _____
The Mundell-Fleming Model
What if domestic r > r*
r
Y
IS (e)
LM
r*
The Mundell-Fleming Model
The model on a Y --- e graph
Goods market IS* curve
E = C (Y-T) + I (r*) + G + NX (e)
e2
e2
E
Y
Y=E
E
e1
Y1
Y2
IS*
e
Y
e1
NX
e
NX(e)
The Mundell-Fleming Model
2) Money market and LM* curve
M/P=L (r*, Y)
r
Y
Y
LM
e
r*
LM*
The Mundell-Fleming Model
3) IS* & LM*
e
Y
IS*
LM*