How well does the Mundell-Fleming model fit Australian data since the collapse of Bretton Woods?

Research output: Contribution to journalArticle

11 Citations (Scopus)

Abstract

Australian time series for the nominal interest rate, real output, the nominal exchange rate, prices and nominal money since 1973 are characterized by a vector autoregressive process driven by five exogenous disturbances. Those disturbances are identified so that they can be interpreted as the five main sources of fluctuations found in the Mundell-Fleming model of a small open economy under flexible exchange rates, namely: world interest rate, aggregate supply, IS, money supply and money demand shocks. The dynamic responses of the estimated model to the structural shocks are analysed and shown to match most of the predictions of the Mundell-Fleming model.

Original languageEnglish
Pages (from-to)397-407
Number of pages11
JournalApplied Economics
Volume31
Issue number3
DOIs
Publication statusPublished - 1999 Jan 1

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Bretton Woods
Mundell-Fleming model
Money supply
Interest rates
Demand shocks
Flexible exchange rates
Real output
Fluctuations
Vector autoregressive process
Prediction
Dynamic response
Aggregate supply
Money demand
Nominal exchange rate
Nominal interest rate
Structural shocks
Small open economy

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Cite this

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How well does the Mundell-Fleming model fit Australian data since the collapse of Bretton Woods? / Huh, Hyeon-Seung.

In: Applied Economics, Vol. 31, No. 3, 01.01.1999, p. 397-407.

Research output: Contribution to journalArticle

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