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Application of the IS-MP-IA model to the Singapore economy and policy implications

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  • Yu Hsing

    (Southeastern Louisiana University)

Abstract

Extending the IS-MP-IA model (Romer, 2000), we find that equilibrium output in Singapore is negatively affected by the expected inflation rate and the world interest rate and positively influenced by real appreciation, stock market performance, and world output. Equilibrium GDP would rise by 0.872% if the real effective exchange rate rises by 1%. The coefficient of real government deficit spending is found to be insignificant, suggesting that pursuing fiscal discipline and budget surpluses in the long run by the Singapore government is appropriate.

Suggested Citation

  • Yu Hsing, 2005. "Application of the IS-MP-IA model to the Singapore economy and policy implications," Economics Bulletin, AccessEcon, vol. 15(6), pages 1-9.
    • Handle: RePEc:ebl:ecbull:eb-04o10013
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    References listed on IDEAS

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    2. Afia Malik, 2010. "Oil Prices and Economic Activity in Pakistan," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 11(2), pages 223-244, September.

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    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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