IDEAS home Printed from https://ideas.repec.org/a/pid/journl/v14y1975i1p23-32.html
   My bibliography  Save this article

Fiscal and Monetary Policy for Internal and External Stabilization Under Fixed and Floating Rates in the Presence of Capital Movements

Author

Listed:
  • RATTAN J. BHATIA

    (International Monetary Fund, Washington (D.C.).)

Abstract

The effect of fiscal and monetary stabilization policies has been extensively discussed, notably by Mundell [4,5] and Fleming [1]. Mundell discussed the problem under the special assumption of a perfect interest-elastic mobility of international capital flows, but Fleming assumed a less than perfect capital mobility. Mundell contends that "fiscal policy completely loses its force as a domestic stabilizer when the exchange rate is allowed to fluctuate," while monetary policy will have appreciable effects on employment and output. Under fixed exchange rates, on the other hand, monetary policy is shown by Mundell to be ineffective while any positive effects of fiscal policy would be conditional upon the country being able to sustain large trade deficits by either borrowing abroad or running down its accumulated international reserves.

Suggested Citation

  • Rattan J. Bhatia, 1975. "Fiscal and Monetary Policy for Internal and External Stabilization Under Fixed and Floating Rates in the Presence of Capital Movements," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 14(1), pages 23-32.
    • Handle: RePEc:pid:journl:v:14:y:1975:i:1:p:23-32
    as

    Download full text from publisher

    File URL: http://www.pide.org.pk/pdf/PDR/1975/Volume1/23-32.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nawaz A. Hakro & Wadho Waqar Ahmed, 2006. "IMF Stabilization Programs, Policy Conduct and Macroeconomic Outcomes: A Case Study of Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 11(1), pages 35-62, Jan-Jun.

    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:pid:journl:v:14:y:1975:i:1:p:23-32. 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: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.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.