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A Portfolio Balance Model of the Open Economy

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  2. Economics, Finance, Business & Management
  3. Credit and Capital Markets – Kredit und Kapital
  4. Vol. 52, Issue 4
  5. pp. 457–476

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Dornbusch, R. A Portfolio Balance Model of the Open Economy. Credit and Capital Markets – Kredit und Kapital, 52(4), 457-476. https://doi.org/10.3790/ccm.52.4.457
Dornbusch, Rüdiger "A Portfolio Balance Model of the Open Economy" Credit and Capital Markets – Kredit und Kapital 52.4, 2019, 457-476. https://doi.org/10.3790/ccm.52.4.457
Dornbusch, Rüdiger (2019): A Portfolio Balance Model of the Open Economy, in: Credit and Capital Markets – Kredit und Kapital, vol. 52, iss. 4, 457-476, [online] https://doi.org/10.3790/ccm.52.4.457
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A Portfolio Balance Model of the Open Economy

Dornbusch, Rüdiger

Credit and Capital Markets – Kredit und Kapital, Vol. 52 (2019), Iss. 4 : pp. 457–476

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Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/ccm.52.4.457
Language
English
Pages
20

Author Details

Prof. Dr. Rüdiger Dornbusch ?†

References

  1. Allen, P. R. (1972): Money and growth in open economies, Review of Economic Studies 39 (118), pp. 213–219.  Google Scholar
  2. Boyer, R. (1971): The dynamics of an open, monetary economy: Growth and the balance of payments, unpublished Ph.D. dissertation (University of Chicago, Chicago, Ill.).  Google Scholar
  3. Branson, W. (1972): Macroeconomic equilibrium with portfolio balance in open economics, unpublished manuscript (Institute for International Studies, Stockholm).  Google Scholar
  4. Cagan, P. (1958): Why do we use money in open market operations? Journal of Political Economy, Feb.  Google Scholar
  5. Dornbusch, R. (1971a): Notes on growth and the balance of payments, Canadian Journal of Economics, Aug.  Google Scholar
  6. Dornbusch, R. (1971b): Notes on two-sector small country growth, Center for Mathematical Studies in Business and Economics Report 7154 (University of Chicago, Chicago, Ill.).  Google Scholar
  7. Dornbusch, R (1973): Money, devaluation and nontraded goods, American Economic Review, Dec.  Google Scholar
  8. Foley, D./Sidrauski, M. (1971): Monetary and fiscal policy in a growing economy (Macmillan, New York).  Google Scholar
  9. Frenkel, J. A. (1970): Money, wealth and the balance of payments in a model of accumulation, unpublished Ph.D. dissertation (University of Chicago, Chicago, Ill.).  Google Scholar
  10. Frenkel, J. A. (1971): A theory of money, trade and the balance of payments, Journal of International Economics, May.  Google Scholar
  11. Frenkel, J. A./Fischer, S. (1972): International capital movements along balanced growth paths: Comments and extensions, Economic Record, June.  Google Scholar
  12. Friedman, M. (1969): The optimum quantity of money (Aldine, Chicago, Ill.) Ch. 2.  Google Scholar
  13. Hawtrey, R. G. (1928): The gold standard and the balance of payments, Economic Journal, pp. 50–68.  Google Scholar
  14. Johnson, H. G. (1972): The monetary approach to balance of payments theory, Journal of Financial and Quantative Analysis, March.  Google Scholar
  15. Jones, R. W. (1968): Monetary and fiscal policy for an economy with fixed exchange rates, Journal of Political Economy, July/Aug.  Google Scholar
  16. Jones, R. W. (1969): Portfolio balance and international payments adjustment, in: R. A. Mundell and A. Swoboda, eds., Monetary problems of the international economy (University of Chicago Press, Chicago, Ill.).  Google Scholar
  17. Komiya, R. (1969): Economic growth and the balance of payments, Journal of Political Economy, Jan./Feb.  Google Scholar
  18. Lee, J. (1972): Money, trade and capital movement for a growing small economy, unpublished manuscript (University of Rochester, Rochester, N.Y.).  Google Scholar
  19. McKinnon, R. (1969): Portfolio balance and international payments adjustment, in: R. A. Mundell and A. Swoboda, eds., Monetary problems of the international economy (University of Chicago Press, Chicago, Ill.).  Google Scholar
  20. McKinnon, R./Oates, W. (1966): The implications of international economic integration for monetary, fiscal and exchange rate policy, Studies in International Finance, no. 16 (International Finance Section. Princeton, N.J.).  Google Scholar
  21. Metzler, L. (1968): The process of international adjustment under conditions of full employment: A Keynesian view, in: H. Johnson and R. Caves, eds., Readings in international economics (Irwin, Homewood, Ill.).  Google Scholar
  22. Metzler, L. (1973): Wealth, saving and the rate of interest, in his ‘Collected Papers’ (Harvard University Press, Cambridge, Mass.).  Google Scholar
  23. Mundell, R. A. (1968): International economics (Macmillan, New York).  Google Scholar
  24. Mundell, R. A. (1971): Monetary theory (Goodyear, Pacific Palisades, Calif.).  Google Scholar
  25. Mussa, M. (1971a): Twice the transfer problem plus David Hume, unpublished manuscript (University of Chicago, Chicago, Ill.).  Google Scholar
  26. Mussa, M. (1971b): A simple general equilibrium model of trade and the balance of payments, unpublished manuscript (University of Chicago, Chicago. Ill.).  Google Scholar
  27. Mussa, M. (1973): A study in macroeconomic dynamics: A. Metzleric approach, unpublished manuscript (University of Rochester, Rochester, N.Y.).  Google Scholar
  28. Purvis, D. (1972): More on growth and the balance of payments: The adjustment process, Canadian Journal of Economics, Nov.  Google Scholar
  29. Roper, D. (1969): Macroeconomic policies and the distribution of tile world money supply, Quarterly Journal of Economics, May.  Google Scholar
  30. Salop, J. (1973): The exchange rate and the terms of trade, unpublished manuscript (Board of Governors of the Federal Reserve System, Washington, DC.).  Google Scholar
  31. Swoboda, A. (1972): Equilibrium, quasi-equilibrium and macroeconomic policies under fixed exchange rates, Quarterly Journal of Economics, Feb.  Google Scholar
  32. Tobin, J. (1961): Money, capital and other stores of value, American Economic Review, May.  Google Scholar
  33. Tobin, J. (1969): A general equilibrium approach to monetary theory, Journal of Money, Credit and Banking, Feb.  Google Scholar
  34. Tower, E. (1972): Monetary and fiscal policy under fixed and flexible exchange rates in the n, Journal of Money, Credit and Banking, Nov.  Google Scholar
  35. Von Neumann-Whitman, M. (1970): Policies for internal and external balance, Special Papers in international Economics, no. 9 (International Finance Section, Princeton, NJ.).  Google Scholar
  36. Allen, P. R. (1972): Money and growth in open economies, Review of Economic Studies 39 (118), pp. 213–219.  Google Scholar
  37. Boyer, R. (1971): The dynamics of an open, monetary economy: Growth and the balance of payments, unpublished Ph.D. dissertation (University of Chicago, Chicago, Ill.).  Google Scholar
  38. Branson, W. (1972): Macroeconomic equilibrium with portfolio balance in open economics, unpublished manuscript (Institute for International Studies, Stockholm).  Google Scholar
  39. Cagan, P. (1958): Why do we use money in open market operations? Journal of Political Economy, Feb.  Google Scholar
  40. Dornbusch, R. (1971a): Notes on growth and the balance of payments, Canadian Journal of Economics, Aug.  Google Scholar
  41. Dornbusch, R. (1971b): Notes on two-sector small country growth, Center for Mathematical Studies in Business and Economics Report 7154 (University of Chicago, Chicago, Ill.).  Google Scholar
  42. Dornbusch, R (1973): Money, devaluation and nontraded goods, American Economic Review, Dec.  Google Scholar
  43. Foley, D./Sidrauski, M. (1971): Monetary and fiscal policy in a growing economy (Macmillan, New York).  Google Scholar
  44. Frenkel, J. A. (1970): Money, wealth and the balance of payments in a model of accumulation, unpublished Ph.D. dissertation (University of Chicago, Chicago, Ill.).  Google Scholar
  45. Frenkel, J. A. (1971): A theory of money, trade and the balance of payments, Journal of International Economics, May.  Google Scholar
  46. Frenkel, J. A./Fischer, S. (1972): International capital movements along balanced growth paths: Comments and extensions, Economic Record, June.  Google Scholar
  47. Friedman, M. (1969): The optimum quantity of money (Aldine, Chicago, Ill.) Ch. 2.  Google Scholar
  48. Hawtrey, R. G. (1928): The gold standard and the balance of payments, Economic Journal, pp. 50–68.  Google Scholar
  49. Johnson, H. G. (1972): The monetary approach to balance of payments theory, Journal of Financial and Quantative Analysis, March.  Google Scholar
  50. Jones, R. W. (1968): Monetary and fiscal policy for an economy with fixed exchange rates, Journal of Political Economy, July/Aug.  Google Scholar
  51. Jones, R. W. (1969): Portfolio balance and international payments adjustment, in: R. A. Mundell and A. Swoboda, eds., Monetary problems of the international economy (University of Chicago Press, Chicago, Ill.).  Google Scholar
  52. Komiya, R. (1969): Economic growth and the balance of payments, Journal of Political Economy, Jan./Feb.  Google Scholar
  53. Lee, J. (1972): Money, trade and capital movement for a growing small economy, unpublished manuscript (University of Rochester, Rochester, N.Y.).  Google Scholar
  54. McKinnon, R. (1969): Portfolio balance and international payments adjustment, in: R. A. Mundell and A. Swoboda, eds., Monetary problems of the international economy (University of Chicago Press, Chicago, Ill.).  Google Scholar
  55. McKinnon, R./Oates, W. (1966): The implications of international economic integration for monetary, fiscal and exchange rate policy, Studies in International Finance, no. 16 (International Finance Section. Princeton, N.J.).  Google Scholar
  56. Metzler, L. (1968): The process of international adjustment under conditions of full employment: A Keynesian view, in: H. Johnson and R. Caves, eds., Readings in international economics (Irwin, Homewood, Ill.).  Google Scholar
  57. Metzler, L. (1973): Wealth, saving and the rate of interest, in his ‘Collected Papers’ (Harvard University Press, Cambridge, Mass.).  Google Scholar
  58. Mundell, R. A. (1968): International economics (Macmillan, New York).  Google Scholar
  59. Mundell, R. A. (1971): Monetary theory (Goodyear, Pacific Palisades, Calif.).  Google Scholar
  60. Mussa, M. (1971a): Twice the transfer problem plus David Hume, unpublished manuscript (University of Chicago, Chicago, Ill.).  Google Scholar
  61. Mussa, M. (1971b): A simple general equilibrium model of trade and the balance of payments, unpublished manuscript (University of Chicago, Chicago. Ill.).  Google Scholar
  62. Mussa, M. (1973): A study in macroeconomic dynamics: A. Metzleric approach, unpublished manuscript (University of Rochester, Rochester, N.Y.).  Google Scholar
  63. Purvis, D. (1972): More on growth and the balance of payments: The adjustment process, Canadian Journal of Economics, Nov.  Google Scholar
  64. Roper, D. (1969): Macroeconomic policies and the distribution of tile world money supply, Quarterly Journal of Economics, May.  Google Scholar
  65. Salop, J. (1973): The exchange rate and the terms of trade, unpublished manuscript (Board of Governors of the Federal Reserve System, Washington, DC.).  Google Scholar
  66. Swoboda, A. (1972): Equilibrium, quasi-equilibrium and macroeconomic policies under fixed exchange rates, Quarterly Journal of Economics, Feb.  Google Scholar
  67. Tobin, J. (1961): Money, capital and other stores of value, American Economic Review, May.  Google Scholar
  68. Tobin, J. (1969): A general equilibrium approach to monetary theory, Journal of Money, Credit and Banking, Feb.  Google Scholar
  69. Tower, E. (1972): Monetary and fiscal policy under fixed and flexible exchange rates in the n, Journal of Money, Credit and Banking, Nov.  Google Scholar
  70. Von Neumann-Whitman, M. (1970): Policies for internal and external balance, Special Papers in international Economics, no. 9 (International Finance Section, Princeton, NJ.).  Google Scholar

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Table of Contents

Section Title Page Action Price
Rüdiger Dornbusch: A Portfolio Balance Model of the Open Economy 457
I. Introduction 457
II. The Model 458
III. Equilibrium 461
1. Short-run Equilibrium 461
2. Dynamics 462
3. Long-run Equilibrium 464
IV. Some Implications of the Model 465
1. Open Market Operations 457
2. The Effects of a Devaluation 457
3. Taxation 457
V. Some Further Observations 457
References 457

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