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STABILIZATION POLICIES IN AN OPEN ECONOMY UNDER ALTERNATIVE EXCHANGE RATE AND WAGE RATE CONDITIONS

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Date Issued:
1987
Summary:
This thesis examines how the various instruments of monetary and fiscal policy work in the presence of fixed and flexible exchange rates. Based on the pioneering work of Mundell and Fleming, the traditional view assigns fiscal policy as being highly suitable for a fixed exchange rate regime, while stimulative monetary policy is effective in raising output under floating exchange rates. Once the implicit assumptions of constant prices and wages are relaxed, the conclusions of the original model no longer hold. With the introduction of wage indexation as a mean to adjust nominal wages to changes in the price level, the initial results of policies of the Mundell-Fleming type are reversed. Finally, it was examined how the practical implications of policy actions of the United States and West Germany could be applied to the theoretical models.
Title: STABILIZATION POLICIES IN AN OPEN ECONOMY UNDER ALTERNATIVE EXCHANGE RATE AND WAGE RATE CONDITIONS.
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Name(s): HORN, KLAUS-PETER.
Florida Atlantic University, Degree grantor
Redman, Milton, Thesis advisor
College of Business
Department of Economics
Type of Resource: text
Genre: Electronic Thesis Or Dissertation
Issuance: monographic
Date Issued: 1987
Publisher: Florida Atlantic University
Place of Publication: Boca Raton, Fla.
Physical Form: application/pdf
Extent: 74 p.
Language(s): English
Summary: This thesis examines how the various instruments of monetary and fiscal policy work in the presence of fixed and flexible exchange rates. Based on the pioneering work of Mundell and Fleming, the traditional view assigns fiscal policy as being highly suitable for a fixed exchange rate regime, while stimulative monetary policy is effective in raising output under floating exchange rates. Once the implicit assumptions of constant prices and wages are relaxed, the conclusions of the original model no longer hold. With the introduction of wage indexation as a mean to adjust nominal wages to changes in the price level, the initial results of policies of the Mundell-Fleming type are reversed. Finally, it was examined how the practical implications of policy actions of the United States and West Germany could be applied to the theoretical models.
Identifier: 14386 (digitool), FADT14386 (IID), fau:11188 (fedora)
Collection: FAU Electronic Theses and Dissertations Collection
Note(s): College of Business
Thesis (M.A.)--Florida Atlantic University, 1987.
Subject(s): Monetary policy
Fiscal policy
Held by: Florida Atlantic University Libraries
Persistent Link to This Record: http://purl.flvc.org/fcla/dt/14386
Sublocation: Digital Library
Use and Reproduction: Copyright © is held by the author, with permission granted to Florida Atlantic University to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Use and Reproduction: http://rightsstatements.org/vocab/InC/1.0/
Host Institution: FAU
Is Part of Series: Florida Atlantic University Digital Library Collections.