The Specification and Influence of Goods and Factor Markets in Open Economy Macroeconomic Models
This paper explores the structure and specification of goods and factor markets in open economy macro models. Simple benchmark models are set up which abstract entirely from market structure and focus on goods market structure. These real and monetary factors are combined in a full employment context, then in an unemployment/ variable output context. We consider some applications of specie-flow mechanisms and the purchasing power parity doctrine.
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