La dinámica de la inflación y el nivel de actividad económica en una economía abierta

Waldo Mendoza, Pedro Herrera Catalán () and Irma Arteaga
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Pedro Herrera Catalán: MEF

No 2003-217, Documentos de Trabajo / Working Papers from Departamento de Economía - Pontificia Universidad Católica del Perú

Abstract: In this paper we present a model similar to that of Aggregate Supply and Demand, for the study of the fluctuations of the two most important macroeconomic variables: inflation and the level of activity. In the first part we present the case of a closed economy, in which the basic equations will be introduced describing the market of goods, the monetary market, the curve of Phillips and the interaction mechanisms among them. The model will be presented under the assumption of adaptive expectations and rational expectations, and we will see the different trajectories in the dynamics toward the steady state when the monetary authority acts under the Rule of Taylor. In the second part we will develop the model for an open economy. The equation of parity of interest rates will be introduced, incorporating the real exchange rate as a determinant of the level of economic activity. The objective of this second part will be to show that the Rule of Taylor is an important monetary policy tool to stabilize the fluctuations of the level of economic activity in an open economy. We will carry out the analysis with adaptive expectations and under two scenarios: expansive devaluation and recessive devaluation.

Pages: 70 pages
Date: 2003
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