Stabilization Policies in Open Economies

Richard C. Marston

No 1117, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This study analyzes the theory of stabilization policy as it has developed from the trade oriented models of the 1950's to the recent models employing rational expectations. Throughout the study one model is presented with appropriate modifications to take into account international capital mobility, wage flexibility, and rational expectations. The Mundell-Fleming model is presented but with an asset sector based on modern portfolio theory. This same model is analyzed under conditions of full wage and price flexibility, and the propositions associated with the monetary approach to the balance of payments and the exchange rate are discussed. A simplified version of the model is then used to examine the policy ineffectiveness propositions of the new classical economics (as applied to open economies). The study concludes with a brief review of the literature on the choice between exchange rate regimes.

Date: 1983-05
Note: ITI IFM
References: Add references at CitEc
Citations: View citations in EconPapers (48)

Published as Marston, Richard C. "Stabilizaiton Policies in Open Economies." Handbookof International Economics, Vol. II, edited by R.W. Jones and P.B. Kenen, pp. 859-916. Amsterdam: Elsevier Science PublishersB.V., 1985.

Downloads: (external link)
http://www.nber.org/papers/w1117.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:1117

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w1117

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().