Abstract
In this chapter we approach the issue of stock-flow interaction in open economies through a slightly modified version of the Mundell-Fleming-Tobin (MFT) model of Rødseth (2000). This model considers IS-LM goods market equilibria in place of the sluggish Metzlerian goods market adjustment processes of the KMG model. The Goodwin component will also be missing here since aggregate demand is not made dependent on income distribution (i.e., the Rose real wage channel is also neglected).
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© 2011 Toichiro Asada, Peter Flaschel, Tarik Mouakil and Christian Proaño
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Asada, T., Flaschel, P., Mouakil, T., Proaño, C. (2011). Tobinian Stock-Flow Interactions in the Mundell-Fleming Model. In: Asset Markets, Portfolio Choice and Macroeconomic Activity. Palgrave Macmillan, London. https://doi.org/10.1057/9780230307773_5
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DOI: https://doi.org/10.1057/9780230307773_5
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-33133-8
Online ISBN: 978-0-230-30777-3
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)