THE RELATIVE PERFORMANCE OF MACROECONOMIC POLICIES

In: Scottish journal of political economy: the journal of the Scottish Economic Society, Band 37, Heft 4, S. 405-415

Abstract

THIS PAPER ASSUMES IMPERFECT CAPITAL MOBILITY AS WELL AS INTRODUCES RATIONAL EXPECTATIONS INTO A VERSION OF THE FLEMING MODEL, AND EXAMINES HOW THE DEGREE OF WAGE INDEXATION AND THE DISTINCTION BETWEEN UNANTICIPATED AND ANTICIPATED DISTURBANCES AFFECT THE VALIDITY OF THE FLEMING PROPOSITION. SECTION II SPECIFIES THE ANALYTICAL FRAMEWORK; SECTION III COMPUTES THE RATIONAL EXPECTATIONS SOLUTION UNDER TWO EXCHANGE RATE REGIMES; AND SECTION IV INVESTIGATES THE VALIDITY OF THE FLEMING PROPOSITION UNDER DIFFERENT TYPES OF MACROECONOMIC POLICIES. FINALLY, SECTION V SUMMARIZES THE MAIN FINDINGS OF THE PAPER.