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Does the Mundell-Fleming Model apply to Poland?

Yu Hsing
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Yu Hsing: Southeastern Louisiana University, Hammond, Louisiana, USA

Theoretical and Applied Economics, 2019, vol. XXVI, issue 4(621), Winter, 265-272

Abstract: Applying an extended IS-LM model to Poland, this paper finds that fiscal expansion does not raise output but causes real appreciation and that monetary expansion increases output and leads to real depreciation. Besides, a lower real interest rate, a higher real stock price or a lower expected inflation rate helps raise output; and a higher real interest rate, a higher real stock price or a lower expected inflation rate results in real appreciation. Hence, the predictions of the Mundell- Fleming model are applicable to Poland.

Keywords: fiscal expansion; monetary expansion; exchange rates; Mundell-Fleming model. (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:agr:journl:v:xxvi:y:2019:i:4(621):p:265-272