IDEAS home Printed from https://ideas.repec.org/a/bla/scotjp/v37y1990i1p85-95.html
   My bibliography  Save this article

The Relative Performance of Macroeconomic Policies under Alternative Exchange Rates with Wage Indexation and Rational Expectations: The Fleming Proposition Revisited

Author

Listed:
  • Lai, Ching chong
  • Chang, Wen ya

Abstract

This paper introduces rational expectations into a version of the Fleming (1962) model and examines how the degree of wage indexation and the distinction between temporary and permanent disturbances affect the validity of the Fleming proposition regarding the relative efficacy of fiscal and monetary policy. It is found that (1) if macroeconomic shocks are unanticipated and temporary, the Fleming proposition is always invalid if money wages are completely indexed to the domestic price, the foreign price, or a combination of the two; and (2) if macroeconomic shocks are anticipated by the public, the Fleming proposition no longer holds. Copyright 1990 by Scottish Economic Society.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Lai, Ching chong & Chang, Wen ya, 1990. "The Relative Performance of Macroeconomic Policies under Alternative Exchange Rates with Wage Indexation and Rational Expectations: The Fleming Proposition Revisited," Scottish Journal of Political Economy, Scottish Economic Society, vol. 37(1), pages 85-95, February.
    • Handle: RePEc:bla:scotjp:v:37:y:1990:i:1:p:85-95
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:scotjp:v:37:y:1990:i:1:p:85-95. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/sesssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.