Policy Choices in an Open Economy: Some Dynamic Considerations
Journal of Political Economy
1973
Decision rules for stabilization policy in an open economy are examined under alternative specifications of the balance of payments. In particular, distinction between interest-sensitive debt capital and equity capital which responds to an activity variable alters the comparative static properties of instrument assignment. Various aspects of dynamic adjustment are further investigated in a context in which time is endogenous and in which the decision process minimizes a criterion function. It is shown that traditional one-to-one pairing of targets and controls may be inferior to assignment of clusters of instruments to some targets for specified time intervals.
- DOI
- 10.1086/260088
- Volume
- 81 (4)
- Pages
- 916-935
- Language
- en
- Export
- BibTeX
- Sources
- crossref openalex