Open Economy Macroeconomics: The Mundell-Fleming Model

In this lecture, I present the central workhorse model of open economy macroeconomics: the Mundell-Fleming model. I first explain the three equations of which it consists (IS curve, LM curve, and IP curve) and then depict the model graphically. Finally, I use the model to analyze the effects of contractionary monetary policy, expansionary fiscal policy, and of a policy mix of contractionary modetary policy combined with expansionary fiscal policy.

For the full Intermediate Macroeconomics Cource, please see the following lectures:

   • Macroeconomics: The Goods Market  
   • Macroeconomics: The Multiplier Effect  
   • Macroeconomics: The IS Curve  
   • Macroeconomics: Movements Along the Curve ...  
   • Macroeconomics: The Money Market  
   • Macroeconomics: The LM Curve  
   • Macroeconomics: The IS-LM Model  
   • Macroeconomics: The Labor Market  
   • Macroeconomics: The Phillips Curve  
   • Macroeconomics: The IS-LM-PC Model  
   • Open Economy Macroeconomics: Exchange Rates  
   • Open Economy Macroeconomics: Purchasing Po...  
   • Open Economy Macroeconomics: Interest Rate...  
   • Open Economy Macroeconomics: The Goods Market  
   • Open Economy Macroeconomics: Fiscal Policy...  
   • Open Economy Macroeconomics: Increases in ...  
   • Open Economy Macroeconomics: Effects of a ...  
   • Open Economy Macroeconomics: Reducing the ...  
   • Open Economy: The Marshall-Lerner Condition  
   • Open Economy Macroeconomics: The Mundell-F...  
   • The Solow Model  
   • The Solow Model With Technological Progress