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Open Economy Dynamics : Contributions to Economics - Michael Carlberg

Open Economy Dynamics

Contributions to Economics

Paperback

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The focus is on the interaction between demand and supply in a small open economy, featuring the dynamics of money wages, private capital, public debtand foreign assets. A macroeconomic shock induces an extended process of adjustment that is characterized by unemployment. This in turn requires a dynamic path of monetary and fiscal policy. As a response to the shock, the central bank continuously adapts the quantity of money so as to keep up full employment all the time. And the government continuously accommodates its purchases of goods and services. Can this be sustained? Or will public and foreign debt tend to explode, thereby squeezing private capital down to zero? As a finding, the answer depends on the government budget constraint, the exchange rate regime, the size of the foreign interest rate, the flexibility of money wages and other factors. The present monograph consists of two major parts, flexible exchange rates (part I) and fixed exchange rates (part II). Each part in turn is composed of two chapters, the basic model (chapter I) and the economy with public sector (chapter II).

Introductionp. 3
Flexible Exchange Ratesp. 11
Basic Modelp. 11
Flexible Money Wagesp. 13
Fixed Money Wagesp. 34
Slow Money Wagesp. 52
Monetary Policyp. 64
Two Countriesp. 71
Capital Gainsp. 75
Portfolio Modelp. 78
Economy With Public Sectorp. 87
Overlapping Generationsp. 89
Flexible Money Wagesp. 95
Fixed Money Wagesp. 103
Slow Money Wagesp. 108
Continuous Budget Balancep. 109
Monetary Policyp. 111
Fiscal Policyp. 113
Monetary Policy with Continuous Budget Balancep. 114
Two Countriesp. 116
Portfolio Modelp. 122
Fixed Exchange Ratesp. 125
Basic Modelp. 127
Flexible Money Wagesp. 127
Fixed Money Wagesp. 137
Slow Money Wagesp. 146
Portfolio Modelp. 149
Economy With Public Sectorp. 153
Flexible Money Wagesp. 155
Fixed Money Wagesp. 158
Slow Money Wagesp. 160
Continuous Budget Balancep. 161
Fiscal Policyp. 162
Fiscal Policy with Continuous Budget Balancep. 167
Synopsisp. 171
Conclusionp. 175
Resultp. 183
Symbolsp. 185
Referencesp. 187
Indexp. 199
Table of Contents provided by Blackwell. All Rights Reserved.

ISBN: 9783790807080
ISBN-10: 3790807087
Series: Contributions to Economics
Audience: General
Format: Paperback
Language: English
Number Of Pages: 203
Publisher: Springer-Verlag Berlin and Heidelberg Gmbh & Co. Kg
Country of Publication: DE
Dimensions (cm): 25.4 x 17.78  x 1.17
Weight (kg): 0.38