The Mundell Proposition: A Synthesis of Literature
Resource
經濟論文叢刊, 29(4), 365-401
Journal
經濟論文叢刊
Journal Volume
29
Journal Issue
4
Pages
365-401
Date Issued
2001-12
Date
2001-12
Author(s)
Chen, C.N.
Lai, C.C.
Chang, J.J.
Abstract
Robert Mundell, the winner of the 1999 Nobel Prize in Economic Science, wrote a series of papers in the 1960s. A notable feature of these papers is that the issues of papers of international finance are elegantly integrated with macroeconomic theories. From then on, a lot of new topics in international finance were developed. Among the Mundell contributions, the most significant and path-breaking one is his work on the effectiveness of macroeconomic policies under alternative exchange rate systems. By assuming perfect capital mobility and zero sterilization, two conclusions are established by Mundell (1962). First, fiscal policy is entirely ineffective in raising output under flexible exchange rates but most effective in raising it under fixed exchange rates. Second, monetary policy is entirely ineffective in raising output under fixed exchange rates but most effective in raising it under flexible exchange rates. These results are now dubbed the Mundell proposition in the literature. Over the last three decades, the Mundel proposition has been refined, extended, and revised in a variety of ways. This paper develops a coherent analytical framework to review the existing literature on the robustness of the Mundell proposition.
Subjects
Mundell 命題
財政政策
貨幣政策
the Mundell proposition
fiscal policies
monetary policies
Type
journal article