The Mundell-Fleming Model: A Quarter Century Later

43 Pages Posted: 15 Feb 2006

See all articles by Jacob A. Frenkel

Jacob A. Frenkel

Merrill Lynch & Co. - Sovereign Advisory Group and Global Financial Institutions Group; National Bureau of Economic Research (NBER)

Assaf Razin

Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Date Written: July 2, 1987

Abstract

The Mundell-Fleming model of international macroeconomics originated in the early 1960s and was extended during the ensuing quarter century. This paper develops an exposition which integrates the various facets of the model and incorporates its extensions into a unified analytical framework. Attention is given to (i) the distinction between short-run and long-run effects of policies, (ii) the implications of debt and tax finance of government expenditures and (iii) the role of the exchange rate regime in this regard. By identifying the key mechanisms operating in the model the exposition clarifies its limitations and facilitates comparison with other more modern approaches.

JEL Classification: 4310

Suggested Citation

Frenkel, Jacob A. and Razin, Assaf, The Mundell-Fleming Model: A Quarter Century Later (July 2, 1987). IMF Working Paper, Vol. , pp. 1-87, 1987. Available at SSRN: https://ssrn.com/abstract=884792

Jacob A. Frenkel (Contact Author)

Merrill Lynch & Co. - Sovereign Advisory Group and Global Financial Institutions Group

New York, NY
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Assaf Razin

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
+972 3 640 7303 (Phone)
+972 3 640 9908 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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