IDEAS home Printed from https://ideas.repec.org/p/isu/genstf/197810010700001143.html
   My bibliography  Save this paper

Lags and the Assignment Problem: A Note

Author

Listed:
  • Lapan, Harvey
  • Enders, Walter

Abstract

Mundell [5] has demonstrated that monetary policy should be paired with external balance and fiscal policy with internal balance. This seminal article led to a voluminous literature 1 which at­ tempted to rectify many of the problems inherent in Mundell's flow equilibrium model. Harry John­ son [2] has characterized this extension of Mun­ dell's work as having "... lent itself to almost infinite mathematical product differentiation, with little significant improvement in quality of eco­ nomic product ..." Although we do not fully agree with Harry Johnson-for there are many deficien­ cies in Mundell's model-we do believe that more can be said concerning the "Assignment Problem" in the context of Mundell's model. Specifically, we examine the effects of introducing discrete lags into the Mundell model. Part A of this note presents a generalized discrete time version of Mundell's model and shows that the "Principle of Effective Market Classification" cannot guarantee stability. Part B then examines how the presence of an out­ side lag affects the results of Part A.

Suggested Citation

  • Lapan, Harvey & Enders, Walter, 1978. "Lags and the Assignment Problem: A Note," ISU General Staff Papers 197810010700001143, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:197810010700001143
    as

    Download full text from publisher

    File URL: https://dr.lib.iastate.edu/server/api/core/bitstreams/cc5b2a8f-fa3f-4f5f-a3cb-ed9f8dd4cec2/content
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert A. Mundell, 1962. "The Appropriate Use of Monetary and Fiscal Policy for Internal and External Stability," IMF Staff Papers, Palgrave Macmillan, vol. 9(1), pages 70-79, March.
    2. Levin, Jay H, 1972. "International Capital Mobility and the Assignment Problem," Oxford Economic Papers, Oxford University Press, vol. 24(1), pages 54-67, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Obstfeld, Maurice, 1980. "Imperfect asset substitutability and monetary policy under fixed exchange rates," Journal of International Economics, Elsevier, vol. 10(2), pages 177-200, May.
    2. Enders, Walter & Lapan, Harvey, 1976. "Portfolio Balance and the Assignment Problem in an Interdependent World," ISU General Staff Papers 197601010800001026, Iowa State University, Department of Economics.
    3. Wen-Ya Chang & Ching-Chong Lai, 2002. "The Policy Assignment Principle with Wage Indexation," The American Economist, Sage Publications, vol. 46(2), pages 80-87, October.
    4. Mădălin Viziniuc, 2017. "Potential Gains from Cooperation Between Monetary and Macroprudential Policies: The Case of an Emerging Economy," Eastern European Economics, Taylor & Francis Journals, vol. 55(5), pages 420-452, September.
    5. Christopher Erceg & Christopher Gust & David López-Salido, 2007. "The Transmission of Domestic Shocks in Open Economies," NBER Chapters, in: International Dimensions of Monetary Policy, pages 89-148, National Bureau of Economic Research, Inc.
    6. Brown, Malcolm C. & Crampton, Peter, 1997. "New Zealand policy strategies concerning the funding of general practitioner care," Health Policy, Elsevier, vol. 41(2), pages 87-104, August.
    7. Michael Michaely, 1971. "An Over-all View of Policy Patterns," NBER Chapters, in: The Responsiveness of Demand Policies to Balance of Payments: Postwar Patterns, pages 30-70, National Bureau of Economic Research, Inc.
    8. Jérôme Creel & Éloi Laurent & Jacques Le Cacheux, 2007. "Politiques et performances macroéconomiques de la zone euro. Institutions, incitations, stratégies," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(3), pages 249-281.
    9. Jan Libich & Andrew Hughes Hallett & Petr Stehlik, 2007. "Monetary And Fiscal Policy Interaction With Various Degrees And Types Of Commitment," CAMA Working Papers 2007-21, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    10. Salim Dehmej & Leonardo Gambacorta, 2019. "Macroprudential Policy in a Monetary Union," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(2), pages 195-212, June.
    11. Svitlana Galeshchuk, 2017. "Technological bias at the exchange rate market," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 24(2-3), pages 80-86, April.
    12. Ian G. Sharpe, 1976. "Sources of Growth of the Australian Money Supply," Australian Journal of Management, Australian School of Business, vol. 1(1), pages 85-106, April.
    13. Berndsen, Ron & Daniels, Hennie, 1994. "Causal reasoning and explanation in dynamic economic systems," Journal of Economic Dynamics and Control, Elsevier, vol. 18(1), pages 251-271, January.
    14. Hoon, Hian Teck & Phelps, Edmund S., 2007. "A structuralist model of the small open economy in the short, medium and long run," Journal of Macroeconomics, Elsevier, vol. 29(2), pages 227-254, June.
    15. P. D. F. Strydom, 1984. "The New Keynesian Approach to Economic Policy1," South African Journal of Economics, Economic Society of South Africa, vol. 52(3), pages 187-194, September.
    16. V. Sidenko, 2017. "The crisis processes in the EU development: origins and prospects," Economy and Forecasting, Valeriy Heyets, issue 1, pages 7-30.
    17. Charles van Marrewijk, 2005. "Basic Exchange Rate Theories," Tinbergen Institute Discussion Papers 05-024/2, Tinbergen Institute.
    18. Mr. James M. Boughton, 2002. "On the Origins of the Fleming-Mundell Model," IMF Working Papers 2002/107, International Monetary Fund.
    19. Akhand Akhtar Hossain, 2009. "Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 12777.
    20. Lars E. O. Svensson, 2018. "Monetary policy and macroprudential policy: Different and separate?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 51(3), pages 802-827, August.

    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:isu:genstf:197810010700001143. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.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.