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The Multiplier Approach

In: International Finance and Open-Economy Macroeconomics

Author

Listed:
  • Giancarlo Gandolfo

    (Accademia Nazionale dei Lincei)

Abstract

The multiplier analysis of the balance of payments (also called the foreign trade multiplier) has a twofold relevance. On the one hand, it can be seen as the counterpart, always in a partial equilibrium context, to the analysis based solely on exchange-rate variations, and thus as a step towards the integration of the two mechanisms. On the other hand, it has an importance of its own insofar as it is applicable to an institutional setting in which the exchange rate and prices are rigid. In this chapter all cases are examined: the small open-economy, the two-country case, and the n-country case.

Suggested Citation

  • Giancarlo Gandolfo, 2016. "The Multiplier Approach," Springer Texts in Business and Economics, in: International Finance and Open-Economy Macroeconomics, edition 2, chapter 8, pages 127-159, Springer.
  • Handle: RePEc:spr:sptchp:978-3-662-49862-0_8
    DOI: 10.1007/978-3-662-49862-0_8
    as

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