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Quelques aspects de la transmission internationale de l’inflation

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  • Rabeau, Yves

    (Université de Montréal)

Abstract

In the first section, the impact of a shift in international demand on the price level of a small and open economy is analysed in the framework of the IS and LM diagram and under the assumption of a fixed exchange rate; only short run implications are derived from the analysis. In this keynesian context, it is shown, in particular, that the monetary policy implemented by a large country like the U.S. plays an important role in the assessment of the static short run impact of a change in international demand on the price level of a small country like Canada. In the second section of the paper, it is shown that a dynamic version of a keynesian macro model allows the rate of growth of prices of a small country to converge to the "international rate of inflation". In the last section, longer term issues are discussed in the context of the Scandinavian model of inflation. In particular, it is shown that a country like Canada with large regulated and para-public sectors is quite vulnerable to external inflationary shocks.

Suggested Citation

  • Rabeau, Yves, 1978. "Quelques aspects de la transmission internationale de l’inflation," L'Actualité Economique, Société Canadienne de Science Economique, vol. 54(2), pages 147-175, avril-jui.
    • Handle: RePEc:ris:actuec:v:54:y:1978:i:2:p:147-175
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    References listed on IDEAS

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    1. Dunn, Robert M, Jr, 1970. "Flexible Exchange Rates and Oligopoly Pricing: A Study of Canadian Markets," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 140-151, Jan.-Feb..
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    5. Kouri, Pentti J K & Porter, Michael G, 1974. "International Capital Flows and Portfolio Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 82(3), pages 443-467, May/June.
    6. Odd Aukrust, 1970. "Prim I: A Model Of The Price And Income Distribution Mechanism Of An Open Economy," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 16(1), pages 51-78, March.
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