Le modèle Mundell-Fleming: Au cœur de la macroéconomie internationale ( Culture économique t. 7) (French Edition) – Kindle edition by Jean Blaise Mimbang. 17 juil. traditionnel de Mundell-Fleming a ensuite souligné la dichotomie . () a par exemple proposé récemment, le critère d’homogénéité des. View Notes – Chapitre 4 – from ECONOMIE at Université de Nantes. Modle de Mundell-Fleming IS-LM en conomie ouverte A partir du modle de.
|Published (Last):||3 August 2017|
|PDF File Size:||9.78 Mb|
|ePub File Size:||6.43 Mb|
|Price:||Free* [*Free Regsitration Required]|
Under the Mundell—Fleming framework of a small economy facing perfect capital mobility, the domestic interest rate is fixed and equilibrium in both markets can only be maintained by adjustments of the nominal exchange rate or the money supply by international funds flows.
Higher domestic income GDP leads to more spending on imports and hence lower net exports; higher foreign income leads to higher spending by foreigners on the country’s exports and thus higher net exports.
Under flexible exchange rates, the nominal money supply is completely under the control of the central bank. To maintain the exchange rate and eliminate pressure on it, the monetary authority purchases foreign currency using domestic funds in order to shift the LM curve to the right. Thus, a monetary expansion, in the short run, does not necessarily improve the trade balance.
Mundell–Fleming model – Wikipedia
If there is pressure to appreciate the domestic currency’s exchange rate because the currency’s demand exceeds its supply in the foreign exchange market, the local authority buys foreign currency with domestic currency to increase the domestic currency’s supply in the foreign exchange market. This keeps the domestic currency’s exchange rate at its targeted level. That being said, capital outflow will increase which will lead to a decrease in the real exchange rate, ultimately shifting the IS curve right until interest rates equal global interest rates assuming horizontal BOP.
In contrast, under fixed exchange rates e is exogenous and the balance of payments surplus is determined by the mkdle.
Mundell’s paper suggests that the model can be applied to Zurich, Brussels and so on. The Mundell—Fleming model under a fixed exchange rate regime also has completely different implications from those of the closed economy IS-LM model. Retrieved from ” https: In a system of flexible exchange rates, central banks allow the exchange rate to be determined by market forces alone. This principle is frequently called the ” impossible trinity ,” “unholy trinity,” “irreconcilable trinity,” “inconsistent trinity,” policy trilemma,” or the “Mundell—Fleming trilemma.
An increase in the global interest rate shifts the BoP curve upward and causes capital flows out of the local economy. The exchange rate changes enough to shift the IS curve to the location where it crosses the new BoP curve at its intersection with the unchanged LM curve; now the domestic interest rate equals the new level of the global interest rate. In this graph, under less than perfect capital mobility the positions of both the IS curve and the BoP curve depend on the exchange rate as discussed belowsince the IS-LM graph is actually a two-dimensional cross-section of a three-dimensional space involving all of the interest rate, income, and the exchange rate.
However, in reality, the world interest rate is different from the domestic rate. But for a small open economy with perfect capital mobility and a flexible exchange rate, the domestic interest rate is predetermined by the horizontal BoP curve, and so by the LM equation given previously there is exactly one level of output that can make the money market be in equilibrium at that interest rate.
Modèle OG-DG — Wikipédia
Under less than perfect capital mobility, the depreciated exchange rate shifts the BoP curve somewhat back down. If there is pressure to devalue the domestic currency’s exchange rate because the supply of domestic currency exceeds its demand in foreign exchange markets, the local authority buys domestic currency with foreign currency to decrease the domestic currency’s supply in the foreign exchange market. Views Read Edit View history.
This puts pressure on the home currency to depreciate, so the central bank must buy the home currency — that is, sell some of its foreign currency reserves — to accommodate this outflow.
In the end, the interest rate stays the same but the general income in the economy increases. An increase in money supply shifts the LM curve to the right. The denominator is positive, and the numerator is positive or negative. A higher e leads to higher net exports.
This result is not compatible with what the Mundell-Fleming predicts. Sargent Adam Smith Knut Wicksell.
But in the Mundell—Fleming open economy model with perfect capital mobility, monetary policy becomes ineffective. Under the fixed exchange rate system, the central bank operates in the foreign exchange market to maintain a specific exchange rate.
The reason is that a large open mhndell has the characteristics of both an autarky and a small open economy. Under perfect capital mobility, the new BoP curve will be horizontal at the new world interest rate, so the equilibrium domestic interest rate will equal the pe interest rate.
When the latter goes up, the BoP curve shifts upward by the same amount, and stays there. The central bank under a fixed exchange rate system would have to instantaneously intervene by selling foreign money in exchange for domestic money to maintain the exchange rate. Results for a large open economy, on the other hand, can be consistent with those predicted by the IS-LM model. To maintain the fixed exchange rate, the central bank must accommodate the capital flows in or out which are caused by a change of the global interest rate, in order to offset pressure on the exchange rate.
He adds that, in the short run, fiscal policy works because it raises interest rates and the velocity of money. The strengthening of the currency will mean it is more expensive for domestic producers to export so net exports will decrease therefore cancelling out the rise in government spending and shifting the IS curve to the left.
Reprinted in Mundell, Robert A.
Under flexible exchange ratesthe exchange rate is the third endogenous variable while BoP is set equal to zero. This depreciates the local currency and boosts net exports, shifting the IS curve to the right.
The shift results in an incipient rise in the interest rate, and hence upward pressure on the exchange rate value of the domestic currency as foreign funds start to flow in, attracted by the higher interest rate. Higher lagged income or a lower real interest rate leads to ed investment spending.
Canadian Journal of Economic and Political Science. From Wikipedia, the free encyclopedia. The Mundell—Fleming model has been used to argue that an economy cannot simultaneously maintain a fixed exchange ratefree capital movementand an independent monetary flemign.
Increased government expenditure shifts the IS curve to the right.