capital mobility

Feature image for “Policy Ineffectiveness in Open Economy Models,” showing a 2×2 matrix where fiscal policy is strong under fixed exchange rates but fails under floating rates, while monetary policy fails under fixed rates but is strong under floating rates.

Macroeconomic Trends and Analysis

Policy Ineffectiveness Open Economy: Channels and Regimes

Policy ineffectiveness in open economy models means a correct policy moves no output: monetary policy fails under a peg, fiscal...

June 2, 2026

Feature image for “Floating Exchange Rates in Mundell-Fleming,” showing how a floating exchange-rate regime makes monetary policy strong while fiscal policy has no lasting effect because the exchange rate adjusts.

Macroeconomic Trends and Analysis

Floating Exchange Rates Mundell-Fleming: Policy Under a Float

Floating exchange rates in Mundell-Fleming make monetary policy powerful and fiscal policy ineffective, because the free currency, not reserves, adjusts...

June 2, 2026

Feature image for “Fixed Exchange Rates in Mundell-Fleming,” showing how a fixed exchange-rate peg makes fiscal policy powerful while monetary policy has no lasting effect because the money supply adjusts to defend the peg.

Macroeconomic Trends and Analysis

Fixed Exchange Rates Mundell-Fleming: Policy Under a Peg

Fixed exchange rates in Mundell-Fleming make fiscal policy powerful and monetary policy ineffective, because defending the peg ties the money...

June 2, 2026

Feature image for the IS-LM-BP model showing a split layout with a Macroeconomics category badge, the title “The IS-LM-BP Model,” and a right-side diagram where the IS, LM, and BP curves intersect at a single equilibrium point E.

Macroeconomic Trends and Analysis

IS-LM-BP Model: Open Economy Equilibrium Diagram

The IS-LM-BP model adds a balance-of-payments curve to the IS-LM diagram, showing how goods, money, and external markets meet at...

June 2, 2026