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Simple open economy macro with comprehensive accounting: a two country model

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dc.contributor.authorGodley, Wynne
dc.contributor.authorLavoie, Marc
dc.date.accessioned2010-05-20T10:50:36Z
dc.date.available2010-05-20T10:50:36Z
dc.date.issued2005-02
dc.description.abstractThis paper presents a stock flow model of two economies (together comprising the whole world) which trade goods and financial assets with one another. The accounting framework, though comprehensive in its own terms, is very much simplified so as to reach the main conclusions as simply and easily as possible. The first part of the paper describes a single-economy on a fixed exchange rate, with no private capital flows, in order to obtain simple analytic solutions which display the basic constraints and forces at work. The second part describes a flexible exchange rate model, with two economies trading financial assets as well as merchandise. A final section adapts the two country model to describe a fixed exchange rate regime. In all models interest rates are exogenous and the money supply is (found to be) endogenous.en
dc.identifier.citationJEL classification: F41, F42, F47en
dc.identifier.urihttp://www.dspace.cam.ac.uk/handle/1810/225164
dc.language.isoenen
dc.publisherCFAP, Cambridge Judge Business School, University of Cambridgeen
dc.relation.ispartofseriesCFAP Working Paperen
dc.relation.ispartofseries20en
dc.rightsAll Rights Reserveden
dc.rights.urihttps://www.rioxx.net/licenses/all-rights-reserved/en
dc.subjectopen economy macroeconomicsen
dc.subjectstocks and flowsen
dc.subjecttwo country modelsen
dc.subjectexchange rate determination in asset marketsen
dc.titleSimple open economy macro with comprehensive accounting: a two country modelen
dc.typeWorking Paperen
dc.type.versionpublished versionen
workflow.identifier.doidoi:10.17863/CAM.105265*

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