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Open economy macroeconomics is included in the JEL classification codes as JEL: F4 Pages in category "Open economy macroeconomics" The following 9 pages are in this category, out of 9 total.
The Mundell–Fleming model under a fixed exchange rate regime also has completely different implications from those of the closed economy IS-LM model. In the closed economy model, if the central bank expands the money supply the LM curve shifts out, and as a result income goes up and the domestic interest rate goes down. But in the Mundell ...
A macroeconomic model is an analytical tool designed to describe the operation of the problems of economy of a country or a region. These models are usually designed to examine the comparative statics and dynamics of aggregate quantities such as the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the level of prices.
An open economy [1] refers to an economy in which both domestic and international entities participate in the trade of goods and services. This type of economy allows for the exchange of products, including technology transfers and managerial expertise. However, certain services, such as a country's railway operations, may not be easily ...
In terms of the circular flow of income model, the leakage that financial institutions provide in the economy is the option for households to save their money. This is a leakage because the saved money cannot be spent in the economy and thus is an idle asset that means not all output will be purchased.
A Robinson Crusoe economy is a simple framework used to study some fundamental issues in economics. [1] It assumes an economy with one consumer, one producer and two goods. The title " Robinson Crusoe " is a reference to the 1719 novel of the same name authored by Daniel Defoe .
The government budget can be directly introduced into the model. We consider now an open economic model with public deficits or surpluses. Therefore the budget is split into revenues, which are the taxes (T), and the spendings, which are transfers (TR) and government spendings (G). Revenue minus spending results in the public (governmental) saving:
The formal model underlying the hypothesis is the uncovered Interest Rate Parity condition which states that in absence of a risk premium, arbitrage will ensure that the depreciation or appreciation of a country's currency vis-à-vis another will be equal to the nominal interest rate differential between them. Since under a peg, i.e. a fixed ...