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The Interdependence of Monetary, Debt and Fiscal Policies in an International Setting

  • John Helliwell
  • Robert McRae

Abstract

There are a number of theoretical and empirical frameworks available for assessing the economic interdependence of nations. The theoretical models are noted for the variety of their assumptions and a corresponding dispersion of results. Most of the empirical frameworks are based entirely on international transmission through trade flows.1 There have been studies of international capital movements, but usually not in a framework wherein the interaction of trade and capital flows can be assessed. To our knowledge, the linked RDX2 — MPS system is the only mechanism currently available for tracing international repercussions in the full context of trade, capital flows and migration.2 The two component models, and the nature of their linkage, have been described elsewhere, and are summarised briefly in the Appendix (p. 167), so that it is only necessary to note here that the two models are reasonably comparable in terms of aggregation, and that both have well-developed financial sectors, and a variety of channels whereby the financial and real sectors influence one another.

Keywords

Exchange Rate Interest Rate Monetary Policy Fiscal Policy Money Supply 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

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Copyright information

© Graduate School of Business, University of Chicago 1977

Authors and Affiliations

  • John Helliwell
  • Robert McRae

There are no affiliations available

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