The Dynamics of a Two-Country Minimodel under Rational Expectations
Paul Masson ()
Annals of Economics and Statistics, 1987, issue 6-7, 37-69
The stability and steady-state properties of a small model of the United States and the Rest of the World (MINIMOD) are examined. It is shown that the marginal propensity to consume out of wealth is a crucial parameter, and estimates are chosen to ensure stability of the model. The need to stabilize government debt as a ratio to GNP is discussed, and a simulation rule is included that adjusts tax rates accordingly. Finally, the dynamics of the model in response to monetary and fiscal shocks are related to the following structural features: the J-curve, lags in money demand, and price stickiness.
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:1987:i:6-7:p:37-69
Access Statistics for this article
Annals of Economics and Statistics is currently edited by Laurent Linnemer
More articles in Annals of Economics and Statistics from GENES Contact information at EDIRC.
Bibliographic data for series maintained by Laurent Linnemer ().