Skip to content

Mundell-Fleming model

October 9, 2015

Impact of monetary and fiscal policies on interest rates & exchange rates.

Under high capital mobility, expansionary monetary policy/restrictive fiscal policy leads to low interest rates & currency depreciation.

Under low capital mobility, expansionary monetary policy/expansion fiscal policy leads to current account deficits & currency depreciation.


From → Economics

Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: