OPEN-ECONOMY MACROECONOMICS AND ECONOMIC STABILITY: A PORTFOLIO THEORY APPROACH

Roseli da Silva ()
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Roseli da Silva: Universidade Presbiteriana Mackenzie (UPM)

Revista de Economia Mackenzie (REM), 2004, vol. 2, issue 2, 97-124

Abstract: The main purpose of this article is to analyze the theoretical developments ofan open economy in the short run in light of portfolio theory, putting histori-cal events in parallel. The theoretical arguments to instrument-target problemin economic policy are reaffirmed as depending on choices between exchan-ge rate and monetary regimes. The model constructed to evaluate those issueshas the following advantage: its economic policy first order impacts are inde-pendent of the hypothesis on the capital mobility levels, as soon as the gene-ralequilibriumapproach ofthe portfoliotheoryimplies gross substitutionconditions between domestic and external financial assets.

Keywords: Economic stabilization; Exchange rate and monetary Regimes; Portfolio theory; Economic policy; Comparative static. (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:aft:journl:v:2:2:2004:jan:dec:p:97-124

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