Precios y nivel de actividad económica en una economia abierta: la oferta y la demanda agregada con tipo de cambio flexible

Waldo Mendoza and Pedro Herrera Catalan ()

No 2004-233, Documentos de Trabajo / Working Papers from Departamento de Economía - Pontificia Universidad Católica del Perú

Abstract: In this paper we present the combined analysis of the offer and the demand added under a regime of flexible exchange rate, for the short, the medium and the long term, in a context of perfect mobility of capitals. This model of supply and demand aggregate, determined the level of prices and the production, given a set of exogenous variables. In the short term, the aggregate supply is perfectly elastic, the demand determines the production level and the level of prices is exogenous. In the medium term, the level of economic activity and the exchange rate exercise an influence on the level of prices, therefore the aggregate supply is of positive slope and it has as parameter the exchange rate; and the variations in the aggregate demand affect to prices and quantities. In the long term, the aggregate supply is perfectly inelastic and the changes in the aggregate demand only affect at the level of prices, not at the level of economic activity; this it depends exclusively on supply factors. Finally, the expected prices will be endogenization, to study the adjustment dynamics toward the balance of the stationary state, before the different shocks of supply and demand.

Pages: 63 pages
Date: 2004
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