IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/152.html
   My bibliography  Save this paper

The Price, Output and Exchange Rate-Overshooting Effects of Monetary, Fiscal and Exchange Intervention Policy in a Two-Country Disequilibrium Model

Author

Listed:
  • Rankin, Neil

Abstract

Monetary, fiscal and exchange intervention policy are examined in a symmetric, two-country, two-period model. Money wages are rigid in period one, causing unemployment. In each period there is a single world output, traded in a perfectly competitive world market. The exchange rate is flexible, and there is perfect capital mobility with perfect foresight. Aoki's method is used to obtain comparative static results, which include as special cases small open and closed economies. Whereas monetary policy effects in this model are consistent with the Mundell-Fleming-Dornbusch framework, fiscal policy always causes higher domestic output and a nominal depreciation, and may well lower foreign output.

Suggested Citation

  • Rankin, Neil, 1987. "The Price, Output and Exchange Rate-Overshooting Effects of Monetary, Fiscal and Exchange Intervention Policy in a Two-Country Disequilibrium Model," CEPR Discussion Papers 152, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:152
    as

    Download full text from publisher

    File URL: http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=152
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. van der Ploeg, F., 1987. "Rationing in open economy and dynamic macroeconomics : A survey," Other publications TiSEM fd411b51-f487-4dde-a0e9-6, Tilburg University, School of Economics and Management.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:152. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.