Razin Fall 2004 – 10 – 06

نویسنده

  • Assaf Razin
چکیده

Consider the Mundell-Fleming model. Assume a transitory component in the residual of the money supply stochastic process, as follows. 0 , mt 1 mt s 1 t m s t m g m ≥ φ ε + φε − + = − − Assume a price determination as follows. p p E) 1 (p e t e t 1 t t) (θ θ − + = − Solve the model for inflation and exchange rate. 2. Assume that the money supply is affected by aggregate demand (that is, the government deficit), as follows. 0 , 1 1 ≤ + + + = − − ρ ε ρ mt t s t m s t d m g m Solve for the endogenous variables, and compute the value of ρ which minimizes the inflation variance.

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_________________________________________________________________________________________________ *Correspondence: Razin, Sergey, Ph.D, Institute of Gene Biology RAS, Vavilov Str. 34/5, 117334 Moscow, Russia e-mail: [email protected], [email protected],[email protected]

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تاریخ انتشار 2004