Alternative Financial Policy Rules in an Open Economy Under Rational and Adaptive Expectations

Preprint OPEN
Blackburn, Keith; Currie, David; Whittaker, R; Wren-Lewis, Simon;
(1985)
  • Subject: Adaptive Expectations; Monetary Policy; Open Economy Macro; Rational Expectations

The potential instability of a fixed monetary rule combined with automatic fixed stabilisers is a well-established feature of closed economy IS/LM models with wealth effects and asset accumulation. This paper examines the stability issue in a general open economy macrom... View more
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