Flexible Exchange Rate and Growth of a Small Open Monetary Economy with Imported Good and Externalities

摘要: This paper proposes a growth model of small open economy with economic structure, flexible exchange rate, money policy and imported good. The integrates the basic features Solow model, Uzawa’s two-sector monetary MIU approach, neoclassical for economy. We simulate demonstrate that system has unique saddle equilibrium point. follow transitional behavior over short-run period time. examine effects changes in policy, propensity to consume import good, hold real money, price externalities industrial sector, save. comparative dynamic analysis provides some important insights. For instance, we show as is increased, both held by household value physical wealth increased. conclusion consistent on relation between Tobin (1956). As our more comprehensive than it explains phenomena which cannot explain. In output service sector sector’s two inputs are while reduced; trade balance improved; capital intensities sectors wage rate consumption levels service, goods all increased; inflation reduced domestic currency appreciated. benefits national well household.