Does the Mundell-Fleming Model apply to Poland?
Applying an extended IS-LM model to Poland, this paper finds that fiscal expansion does not raise output but causes real appreciation and that monetary expansion increases output and leads to real depreciation. Besides, a lower real interest rate, a higher real stock price or a lower expected inflat...
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| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2019-12-01
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| Series: | Theoretical and Applied Economics |
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| Online Access: |
http://store.ectap.ro/articole/1433.pdf
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| Summary: | Applying an extended IS-LM model to Poland, this paper finds that fiscal expansion does
not raise output but causes real appreciation and that monetary expansion increases output and
leads to real depreciation. Besides, a lower real interest rate, a higher real stock price or a lower
expected inflation rate helps raise output; and a higher real interest rate, a higher real stock price
or a lower expected inflation rate results in real appreciation. Hence, the predictions of the Mundell-
Fleming model are applicable to Poland. |
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| ISSN: | 1841-8678 1844-0029 |