Indian Journal of Applied Economics and Business ARF INDIA …arfjournals.com/abstract/25546_1_yu_hsing.pdf · 2020. 5. 9. · Indian Journal of Applied Economics and Business Vol.
Post on 21-Feb-2021
3 Views
Preview:
Transcript
Joseph H. Miller Endowed Professor in Business, Professor of Economics,Department of Management & Business Administration, College of Business
Southeastern Louisiana University, Hammond, Louisiana 70402, USAE-mail: yhsing@selu.edu
Received: 14 January 2020; Revised: 6 February 2020;Accepted: 23 March 2020; Publication: 16 April 2020
Abstract: Applying an extended IS-LM model, this study finds that fiscal expansionraises output and causes real appreciation and that monetary expansion increases outputand causes real depreciation. In addition, a lower real interest rate or a higher real stockprice increases output, and a lower real interest rate or a higher real stock price causesreal appreciation. Therefore, except for the positiveimpact of fiscal expansion on output,the Mundell-Fleming model applies to China.
fiscal expansion, monetary expansion, exchange rates, Mundell-Flemingmodel
E52, E62, F41
Indian Journal of Applied Economics and BusinessVol. 2, No. 1, 2020, pp. 1-11
ARF INDIAAcademic Open Access Publishingwww. arfjournals. com
2 Yu Hsing
Effectiveness of Fiscal and Monetary Policies on Output and the Exchange Rate in China 3
4 Yu Hsing
Effectiveness of Fiscal and Monetary Policies on Output and the Exchange Rate in China 5
Y g Y T G R � S E
M P h R Y S E
�
*( , / , , )Y Y G T M P R S
*( , / , , )E E G T M P R S
hE gG gT
J hE gY gEhY
/ / ( ) /| | 0.G T EY G Y T g g h J
/ / ( ) /| | 0.G T YE G E T g g h J
hE
6 Yu Hsing
1/ /| | 0.EY M P g J
1/ (1 ) /| | 0.YE M P g J
International Financial Statistics,
Effectiveness of Fiscal and Monetary Policies on Output and the Exchange Rate in China 7
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
20 24 28 32 36 40 44 48 52
DEBTY
RG
DP
8 Yu Hsing
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
0 10,000,000 30,000,000 50,000,000
RM1
RG
DP
Effectiveness of Fiscal and Monetary Policies on Output and the Exchange Rate in China 9
Log Log(real GDP) (REER)
10 Yu Hsing
Palgrave Communications,
The QuarterlyReview of Economics and Finance,
International Monetary Fund Staff Papers
Economic Modelling,
China Economic Journal,
Journalof Economic Integration,
Journal of EconomicIntegration,
EconomicModelling,
Review of Keynesian Economics,
Journal ofEconomic perspectives,
Canadian Journal of Economics and Political Science
International Monetary Fund Staff Papers Special,
International Monetary Fund Staff Papers
Journal of Banking & Finance,
Effectiveness of Fiscal and Monetary Policies on Output and the Exchange Rate in China 11
InternationalReview of Economics & Finance,
The Manchester School,
top related