Year: 1980
Author: Schmid, Michael
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 100 (1980), Iss. 3 : pp. 297–336
Abstract
This paper provides a simple synthesis of the Keynesian and monetary approaches to modelling the open economy. On the one hand a supply-management policy of domestic wage-restraint is shown to be a beggar-myneighbour policy under fixed exchange rates. Under flexible rates there is a reduced efficacy of this policy w. r. t. domestic employment because at least in a one-good two-country model flexible rates provide perfect insulation against transmission of domestic price-output impulses to the foreign economy. On the other hand demand-management policy is demonstrated not to be sufficient to fight unemployment and inflation in open economies unless trade unions pursue co-responsible wage policies.
Journal Article Details
Publisher Name: Global Science Press
Language: Multiple languages
DOI: https://doi.org/10.3790/schm.100.3.297
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 100 (1980), Iss. 3 : pp. 297–336
Published online: 1980-03
AMS Subject Headings: Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 40