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Are The Predictions Of The Mundell-Fleming Model Applicable To Argentina?

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  • HSING, Yu

Abstract

Based on an extended IS-LM model incorporating the exchange rate in the money demand function, this paper finds that fiscal expansion is related with a raise in real output and causes the Argentine peso to appreciate and that monetary expansion is related with a rise in real output and causes the Argentine peso to depreciate. Except for the prediction of the ineffectiveness of fiscal expansion on real output, other predictions of the Mundell-Fleming model are applicable to Argentina.

Suggested Citation

  • HSING, Yu, 2021. "Are The Predictions Of The Mundell-Fleming Model Applicable To Argentina?," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 21(1), pages 37-48.
    • Handle: RePEc:eaa:aeinde:v:21:y:2021:i:1_3
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    References listed on IDEAS

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    More about this item

    Keywords

    Mundell-Fleming model; monetary policy; fiscal policy; exchange rates.;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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