IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-03567100.html
   My bibliography  Save this paper

Change, inflation et intérêt : un modèle

Author

Listed:
  • Gilles Oudiz
  • Vivien Levy-Garboua

    (Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres)

  • Pierre Villa

    (LG - Laboratoire des Glucides - UPJV - Université de Picardie Jules Verne - INC-CNRS - Institut de Chimie - CNRS Chimie - CNRS - Centre National de la Recherche Scientifique)

  • Henri Sterdyniak

Abstract

[eng] Exchange rate, inflation and interest rate : a model. . The aim of this paper is to clarify the mechanisms involved in a flexible exchange rates regime for a medium size country like France and to discuss the characteristics of present economic adjustments. The paper is based on a model of an open economy which extends the the traditionnal Keynesian models of Fleming and Mundell, by including some monetarist hypotheses : price flexibility, role of anticipations and portfolio behavior in the determination of capital flows. This model does not assume as is usual the hypothesis- that the money supply is controlled by the authorities, this hypothesis being inadequate in the case of France ; this implies that, in the model, there is no equilibrium exchange rate which would guide rational expectations and that some monetary policy is needed under flexible exchange rates. Finally the supply behavior of firms is formalized in a way that differs from both the Keynesian hypothesis of monetary illusion and the monetarist analysis of the natural unemployment rate.. After having estimated the coefficients of the model for France we used it to study the impact of varions disturbances and of economic policies according to the exchange rate regime and to the mobility of capital.. This study shows the central role played by the exchange rate under flexible exchange rates, mainly as a channel of transmission of monetary policy. Because of this, it is more and more difficult to modify the level of activity without ditering prices : these two variables are more closely related under flexible exchange rates than under fixed exchange rates. This interaction implies that inflation can hardly be reduced without diminishing growth.. The main conclusion which is drawn from our simulations is that under flexible exchange rates thé economy is unstable. This is due neither to the specification of the real part of the model, nor to the hypothesis made for critical elasticities, but to the
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Gilles Oudiz & Vivien Levy-Garboua & Pierre Villa & Henri Sterdyniak, 1978. "Change, inflation et intérêt : un modèle," Post-Print hal-03567100, HAL.
    • Handle: RePEc:hal:journl:hal-03567100
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dornbusch, Rudiger, 1976. "Expectations and Exchange Rate Dynamics," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1161-1176, December.
    2. repec:bla:scandj:v:78:y:1976:i:2:p:255-75 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Michel Aglietta & André Orléan & Gilles Oudiz, 1980. "L'industrie française face aux contraintes de change," Économie et Statistique, Programme National Persée, vol. 119(1), pages 35-63.
    2. Pierre-Alain Muet, 1979. "La modélisation macroéconomique : une étude de la structure et de la dynamique des modèles macroéconométriques," Économie et Prévision, Programme National Persée, vol. 40(1), pages 3-62.
    3. Jean-Pierre Laffargue, 1979. "Spéculation déstabilisante en régime de changes flexibles : une approche d'équilibre général," Revue Économique, Programme National Persée, vol. 30(4), pages 650-675.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Miller, M. & Weller, P., 1988. "Solving Stochastic Saddlepoint Systems: A Qualitative Treatment With Economic Applications," The Warwick Economics Research Paper Series (TWERPS) 309, University of Warwick, Department of Economics.
    2. Hany Eldemerdash & Hugh Metcalf & Sara Maioli, 2014. "Twin deficits: new evidence from a developing (oil vs. non-oil) countries’ perspective," Empirical Economics, Springer, vol. 47(3), pages 825-851, November.
    3. Dal Bianco, Marcos & Camacho, Maximo & Perez Quiros, Gabriel, 2012. "Short-run forecasting of the euro-dollar exchange rate with economic fundamentals," Journal of International Money and Finance, Elsevier, vol. 31(2), pages 377-396.
    4. Niko Hauzenberger & Florian Huber, 2020. "Model instability in predictive exchange rate regressions," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 39(2), pages 168-186, March.
    5. Ken Miyajima, 2013. "Foreign exchange intervention and expectation in emerging economies," BIS Working Papers 414, Bank for International Settlements.
    6. Anella Munro, 2014. "Exchange rates, expected returns and risk," Reserve Bank of New Zealand Discussion Paper Series DP2014/01, Reserve Bank of New Zealand.
    7. Eijffinger, S.C.W. & Schaling, E., 1995. "Optimal commitment in an open economy : Credibility vs. flexibility," Discussion Paper 1995-79, Tilburg University, Center for Economic Research.
    8. Pericoli, Marcello & Taboga, Marco, 2012. "Bond risk premia, macroeconomic fundamentals and the exchange rate," International Review of Economics & Finance, Elsevier, vol. 22(1), pages 42-65.
    9. repec:hal:wpspec:info:hdl:2441/2961 is not listed on IDEAS
    10. Francis Ahking, 2003. "Efficient unit root tests of real exchange rates in the post-Bretton Woods era," Economics Bulletin, AccessEcon, vol. 6(7), pages 1-12.
    11. Patrick Blagrave & Giang Ho & Ksenia Koloskova & Mr. Esteban Vesperoni, 2017. "Fiscal Spillovers: The Importance of Macroeconomic and Policy Conditions in Transmission," IMF Spillover Notes 2017/002, International Monetary Fund.
    12. John Y. Campbell & Luis M. Viceira & Joshua S. White, 2003. "Foreign Currency for Long-Term Investors," Economic Journal, Royal Economic Society, vol. 113(486), pages 1-25, March.
    13. Peter J. Stemp, 1991. "Optimal Weights in a Check‐List of Monetary Indicators," The Economic Record, The Economic Society of Australia, vol. 67(1), pages 1-13, March.
    14. Buiter, Willem H, 1984. "Saddlepoint Problems in Continuous Time Rational Expectations Models: A General Method and Some Macroeconomic Examples," Econometrica, Econometric Society, vol. 52(3), pages 665-680, May.
    15. Omar Al-Ubaydli & John A. List, 2019. "How natural field experiments have enhanced our understanding of unemployment," Nature Human Behaviour, Nature, vol. 3(1), pages 33-39, January.
    16. Beckmann, Joscha & Czudaj, Robert L. & Arora, Vipin, 2020. "The relationship between oil prices and exchange rates: Revisiting theory and evidence," Energy Economics, Elsevier, vol. 88(C).
    17. Jyh-Lin Wu, 1994. "Fiscal announcements and real exchange rate dynamics," Open Economies Review, Springer, vol. 5(2), pages 177-190, March.
    18. Santiago Camara, 2021. "Spillovers of US Interest Rates: Monetary Policy & Information Effects," Papers 2111.08631, arXiv.org, revised Feb 2023.
    19. Bordo, Michael D., 1986. "Explorations in monetary history: A survey of the literature," Explorations in Economic History, Elsevier, vol. 23(4), pages 339-415, October.
    20. Amir H. Mozayani & Sanaz Parvizi, 2016. "Exchange Rate Misalignment in Oil Exporting Countries (OPEC): Focusing on Iran," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 20(2), pages 261-276, Spring.
    21. Zenon Wisniewski, 2021. "Long-Term Relationship Between Prices and Exchange Rates," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 63-86.

    More about this item

    Statistics

    Access and download statistics

    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:hal:journl:hal-03567100. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.