La macroeconomí­a de una economí­a abierta en el corto plazo: el modelo Mundell-Fleming

Waldo Mendoza, Pedro Herrera Catalan () and Ricardo Huaman

No 2003-219, Documentos de Trabajo / Working Papers from Departamento de Economía - Pontificia Universidad Católica del Perú

Abstract: In this paper we present the Mundell - Fleming model for a regime of fixed and flexible exchange rate, in a context of perfect capital mobility. In the first part we present the model for the case of a fixed exchange - regime, in which the basic equations will be introduced describing the market for goods, the monetary market, the domestic market of bonds and the external bond market; as well as the interaction mechanisms between these markets. There will be carried out three simulation exercises, in which the effects will be seen on the production, the international reserves and the domestic interest rate of an expanding fiscal police, a devaluation and an increment of the external interest rate. In the second part we will develop the model for the case of a flexible exchange – regime, and the effects of fiscal and monetary policy, and of an increment of the external interest rate on production, domestic interest rates and the exchange rate will be examined.

Pages: 56 pages
Date: 2003
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