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Introduction
Open economy macroEconomics is not a new field of theoretical enquiry. Itsorigins can be traced back to mercantilist and classical notions of the impact of thetrade balance, gold flows and exchange rate mechanisms (e.g. Hume, 1752). Butformal mathematical models of trade and capital flows and exchange rate movementsare a much more recent development, emerging only over the past 60 years. In thesame year as the publication of Keynes’ General Theory, Harrod and Meade also
published significant works, The Trade Cycle and Economic Analysis and Policyrespectively, parts of which dealt with floating exchange rates and “free capitalmovements”. This https://www.51lunwen.org/liuxuelunwendx/and subsequent work of Meade and Metzler, among others,stimulated a generation of theorists to develop what Mundell calls the “internationalmacroeconomic model” (Mundell, 2002).In our previous work, we examined the development of the early mathematicalmodels of IS-LM closed economy vintage (Darity and Young, 1995). In this paper,we attempt to do the same for the open economy version of IS-LM. Now, there are anumber of the general accounts of the evolution of the open economy macroeconomicmodel, including those of Kenen (1985), Flanders (1989), and Isard (1995), andspecific accounts of the evolution of the "Mundell-Fleming model" by Blejer et.al
(1995), Boyer (2002), Boughton (2003), and Mundell himself (1999, 2001, 2002). Butup to now, the specific development of IS-LM-BP, as distinct from the "Mundell-Fleming” story as told by Mundell, among others, has not been dealt with. Indeed, aswill be shown, IS-LM-BP has a history parallel to the story of Mundell’s models andFleming’s model as told by Mundell, Boyer and Boughton. In this context we must
distinguish between the “Mundell-Fleming” model synthesized by Dornbusch, that is,with flexible exchange rates and perfect capital mobility only (Dornbusch, 1980, 193-194) and the more general IS-LM-BP framework, which encompasses both fixed andflexible exchange rates and all degrees of capital mobility.
The paper is divided into four sections. Section 1 deals with the early
mathematical models of the open economy, including Metzler’s pioneering 1942model and the Laursen-Metzler model (1950); Metzler’s 1951 JPE model is alsobriefly discussed as it influenced Mundell, on Mundell’s own account. This sectionalso deals with the impact of Meade’s 1951 model and Metzler’s models onMundell’s work. In this context, we will integrate the relevant parts of Mundell’saccounts of the development of his models (1999,2001,2002). Section 2 surveys theearly 1960s—the years of "high theory"-- and deals with the characteristics of
Mundell’s models from 1960 to 1964, and compares them to Fleming’s 1962 model.Section 3 deals with the diagrammatic development of IS-LM-BP as it emanatedfrom the important generalized model of Krueger (1965); the “overlooked” linkage ofKrueger’s model to the “Hicksian IS-LL construct” made by Michaely (1968);Takayama’s 1969 “general equilibrium model” based upon the open economyextension, that is “straightforward use”, of IS-LM; the somewhat forgotten “IS-LM-EE” approach of代写留学生论文 Wrightsman (1970); to the appearance, in Branson’s widely-used1972 textbook, of IS-LM-BP with fixed exchange rates; all this before Dornbusch’ssynthesis of https://www.51lunwen.org/liuxuelunwendx/Mundell’s models and Fleming’s model in本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。