Capital Mobility and the Output-Inflation Tradeoff
AbstractIdentifying determinants of the output-inflation tradeoff has long been a key issue in business cycle research. We provide evidence that in countries with greater restrictions on capital mobility, a given reduction in the inflation rate is associated with a smaller loss in output. This result is shown to be consistent with theoretical presumption from a version of the Mundell-Fleming model. Restrictions on capital mobility are measured using the IMF’s Annual Report on Exchange Rate Arrangements and Exchange Restrictions. Estimates of the output-inflation tradeoff are taken from previous studies, viz., Lucas (1973) and Ball, Mankiw and Romer (1988).
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 00/87.
Date of creation: 01 May 2000
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Other versions of this item:
- Loungani, Prakash & Razin, Assaf & Yuen, Chi-Wa, 2001. "Capital mobility and the output-inflation tradeoff," Journal of Development Economics, Elsevier, Elsevier, vol. 64(1), pages 255-274, February.
- Prakash Loungani & Assaf Razin & Chi-Wa Yuen, 1997. "Capital mobility and the output-inflation tradeoff," International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.) 577, Board of Governors of the Federal Reserve System (U.S.).
- Loungani, P. & Eazin, A. & Yuen, C.W., 1996. "Capital Mobility and the Output-Inflation Tradeoff," Papers, Tel Aviv 38-96, Tel Aviv.
- Loungani, Prakash & Razin, Assaf & Yuen, Chi-Wa, 1997. "Capital Mobility and the Output-Inflation Tradeoff," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1577, C.E.P.R. Discussion Papers.
- E00 - Macroeconomics and Monetary Economics - - General - - - General
- H10 - Public Economics - - Structure and Scope of Government - - - General
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