A Small-Open-Economy Model and Endogenous Money Stock

Model malé otevřené ekonomiky a endogenní peněžní nabídka

Jan Kodera, Miloslav Vošvrda and Karel Sladký ()

Acta Oeconomica Pragensia, 2005, vol. 2005, issue 1, 26-35

Abstract: The purpose of this paper is to study a three-equation dynamic model. The first equation describes the commodity market. The second one demonstrates the dynamics of the money market and the third equation is the interest rate parity. The aim is to investigate the conditions of more complex behaviour of the model. The more complex dynamic behaviour, i.e., limit cycles, could appear when nonlinear investment function is used in the model, for example. Furthermore the nonlinear function of money supply depending on interest rate is used in the model.

Keywords: exchange rate dynamics; limit cycle; money market dynamics; non-linear dynamic model; uncovered interest rate (search for similar items in EconPapers)
JEL-codes: E44 (search for similar items in EconPapers)
Date: 2005
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DOI: 10.18267/j.aop.125

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