Open Economy Macroeconomics: The Mundell-Fleming Model
In this lecture, I present the central workhorse model of open economy macroeconomics: the Mundell-Fleming model. I first explain the three equations of which it consists (IS curve, LM curve, and IP curve) and then depict the model graphically. Finally, I use the model to analyze the effects of contractionary monetary policy, expansionary fiscal policy, and of a policy mix of contractionary modetary policy combined with expansionary fiscal policy. For the full Intermediate Macroeconomics Cource, please see the following lectures: • Macroeconomics: The Goods Market • Macroeconomics: The Multiplier Effect • Macroeconomics: The IS Curve • Macroeconomics: Movements Along the Curve ... • Macroeconomics: The Money Market • Macroeconomics: The LM Curve • Macroeconomics: The IS-LM Model • Macroeconomics: The Labor Market • Macroeconomics: The Phillips Curve • Macroeconomics: The IS-LM-PC Model • Open Economy Macroeconomics: Exchange Rates • Open Economy Macroeconomics: Purchasing Po... • Open Economy Macroeconomics: Interest Rate... • Open Economy Macroeconomics: The Goods Market • Open Economy Macroeconomics: Fiscal Policy... • Open Economy Macroeconomics: Increases in ... • Open Economy Macroeconomics: Effects of a ... • Open Economy Macroeconomics: Reducing the ... • Open Economy: The Marshall-Lerner Condition • Open Economy Macroeconomics: The Mundell-F... • The Solow Model • The Solow Model With Technological Progress
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