Joseph H. Miller Endowed Professor in Business, Professor of Economics, Department of Management & Business Administration, College of Business Southeastern Louisiana University, Hammond, Louisiana 70402, USA E-mail: [email protected] 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 expansion raises output and causes real appreciation and that monetary expansion increases output and causes real depreciation. In addition, a lower real interest rate or a higher real stock price increases output, and a lower real interest rate or a higher real stock price causes real 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-Fleming model E52, E62, F41 Indian Journal of Applied Economics and Business Vol. 2, No. 1, 2020, pp. 1-11 ARF INDIA Academic Open Access Publishing www. arfjournals. com
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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: [email protected]
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
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Effectiveness of Fiscal and Monetary Policies on Output and the Exchange Rate in China 3
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Effectiveness of Fiscal and Monetary Policies on Output and the Exchange Rate in China 7
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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,
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