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An Analytical Application Of The Mundell–Fleming Model For Studying Open-Economy Interaction Between Fiscal And Monetary Policy

Author

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  • Dimitar Zlatinov

    (Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski)

Abstract

The paper aims to demonstrate the analytical application of the Mundell-Fleming model for studying the effectiveness of monetary and fiscal policy under different exchange rate regimes. The systematic study of the analytical structure of the model, which very often is presented primarily graphically, and introduction to some aspects of the interaction between fiscal and monetary policy reveal the fundamental economic theory character of the model that even developed on Keynesian assumptions may serve to justify non-Keynesian effects when considering an open economy and endogenous real exchange rate. Moreover, the model could be an appropriate method to analyze the transmission mechanism of macroeconomic policies, which goes far beyond traditional views of its application.

Suggested Citation

  • Dimitar Zlatinov, 2018. "An Analytical Application Of The Mundell–Fleming Model For Studying Open-Economy Interaction Between Fiscal And Monetary Policy," Yearbook of the Faculty of Economics and Business Administration, Sofia University, Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski - Bulgaria, vol. 16(1), pages 125-144, December.
    • Handle: RePEc:sko:yrbook:v:16:y:2018:i:1:p:125-144
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    File URL: http://www.feba.uni-sofia.bg/sko/yrbook/Yearbook16-07.pdf
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    Cited by:

    1. Milen Velushev, 2019. "Creating a host country-specific model of the relationship between gross domestic product and inward foreign direct investments – the case of the Bulgarian economy," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 3-21,22-39.
    2. Gancho Ganchev & Elena Stavrova & Vladimir Tsenkov & Mariya Paskaleva, 2020. "The “impossible trilemma” and the analysis of its validity by visualization through the use of artificial intelligence software," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 56-75,76-94.

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