Asset Markets and Exchange Rates: Modeling an Open Economy - Hardcover

Allen, Polly Reynolds; Kenen, Peter B.

Hardcover

ISBN 10: 0521229820 ISBN 13: 9780521229821

Publisher: Cambridge University Press, 1980

Synopsis

This paperback edition consists of the first three parts of Allen and Kenen's major book, Asset Markets, Exchange Rates, and Economic Integration. These three parts stand alone, as the authors intended and as reviewers have commented. In parts four and five of that volume they extend their model to two countries trading with the outside world and analyze questions of economic integration. The authors synthesize and extend recent developments in international monetary theory using a general model of an open economy that trades goods and assets with the outside world. The model embodies the asset market or portfolio approach to analyzing balance-of-payments adjustment. Exchange rates are determined in the short run by conditions in the asset markets and in the long run by conditions in the goods markets. The goods markets include an export good, and import good, and a nontradeable good. Allen and Kenen show that different assumptions about the substitutability between goods or between assets can generate several popular models as special cases of their own.

About this title

Review

'It seems to me an important achieveent. It works out in detail and in a notably systematic fashion the implications of the new approach to balance of payments or exchange rate theory. One of its most pleasing characteristics is its honesty. The implications of various assumptions are made very clear, and their limitations pointed out.' W. M. Corden, The Economic Journal

'It can justifiably be regarded as an updated version of Meade's treatise on the balance of payments which synthesized neoclassical price theory and Keynesian expenditure theory ... rigorous, elegant, lucid and masterly, this treatise is an outstanding contribution in the taxonomic tradition.' P. Robson, Economica

Edition details

• Publisher: Cambridge University Press
• Publication date: 1980
• Language: English
• ISBN 10: 0521229820
• ISBN 13: 9780521229821
• Binding: Hardcover
• Number of pages: 608