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Asset Markets and Exchange Rates : Modeling an Open Economy - Polly Reynolds Allen

Asset Markets and Exchange Rates

Modeling an Open Economy

Paperback

Published: 12th December 1983
RRP $43.95
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This paperback edition consists of the first three parts of Allen and Kenen's major book, Asset Markets, Exchange Rates, and Economic Integration. These three parts stand alone, as the authors intended and as reviewers have commented. In parts four and five of that volume they extend their model to two countries trading with the outside world and analyze questions of economic integration. The authors synthesize and extend recent developments in international monetary theory using a general model of an open economy that trades goods and assets with the outside world. The model embodies the asset market or portfolio approach to analyzing balance-of-payments adjustment. Exchange rates are determined in the short run by conditions in the asset markets and in the long run by conditions in the goods markets. The goods markets include an export good, and import good, and a nontradeable good. Allen and Kenen show that different assumptions about the substitutability between goods or between assets can generate several popular models as special cases of their own.

'It seems to me an important achieveent. It works out in detail and in a notably systematic fashion the implications of the new approach to balance of payments or exchange rate theory. One of its most pleasing characteristics is its honesty. The implications of various assumptions are made very clear, and their limitations pointed out.' W. M. Corden, The Economic Journal, December 1981 'It can justifiably be regarded as an updated version of Meade's treatise on the balance of payments which synthesized neoclassical price theory and Keynesian expenditure theory ... rigorous, elegant, lucid and masterly, this treatise is an outstanding contribution in the taxonomic tradition.' P. Robson, Economica, February 1982

Preface
Introduction
An agenda
Modeling an Open economy
The structure of the model
Solving the model
Comparative statics: goods-market disturbances
Comparative statics: asset-market and compound disturbance
Dynamics under pegged and flexible exchange rates
Extending the Model
Claims, caveas, and simplifications
On money, income, and insulation
Expectations, speculation, and exchange-rate stability
On the specification of fiscal policy
Analyzing Interdependence
A two-country model
Similarities and symmetries in goods and asset markets
Comparative statics in the two-country model
The Theory of Financial Integration
Dimensions of integration
Market integration, interdependence, and monetary policy under pegged exchange rates
The analytics of a monetary union
Market integration, interdependence, and fiscal policy under pegged exchange rates
Fiscal policy in a monetary union
Appendixes
Glossary
Index
Table of Contents provided by Publisher. All Rights Reserved.

ISBN: 9780521274067
ISBN-10: 0521274060
Series: Modelling an Open Economy
Audience: Professional
Format: Paperback
Language: English
Number Of Pages: 336
Published: 12th December 1983
Publisher: Cambridge University Press
Country of Publication: GB
Dimensions (cm): 22.8 x 15.2  x 1.9
Weight (kg): 0.5