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Title:Two countries : international underemployment inflationary steady-state unbalance growth / BEBR No. 523
Author(s):Brems, Hans
Contributor(s):University of Illinois at Urbana-Champaign. College of Commerce and Business Administration
Subject(s):Unemployment -- Effect of inflation on.
International economic relations.
Issue Date:Ot 20 1978
Publisher:[Urbana, Ill.] : College of Commerce and Business Administration, University of Illinois at Urbana-Champaign,
Series/Report:Faculty working papers ; no. 523
Description:Includes bibliographical references (p. 30).
"In a two-country neoclassical growth model with a flexible exchange rate, simple solutions are found for underemployment inflationary steady-state equilibrium growth. Each rate of growth of the four real wage rates will be the same for any value of the employment fraction and for any value of the inflationary potential. As a result, Friedman's 'natural' rate of unemployment is not unique. Employment and inflation cannot both be controlled by monetary policy. International growth will be balanced only as an odd piece of luck. The purchasing power parity theory of the exchange rate is not the whole story : the rate of growth of the exchange rate depends upon the rates of growth of physical outputs no less than upon the rates of growth of prices. Ultimately it is found to depend upon the employment fractions and the inflationary potentials of both countries."
Rights Information:In copyright. Digitized with permission of the University of Illinois Board of Trustees. Contact for information.
Copyright Ot 20 1978 Board of Trustees University of Illinois.
Date Available in IDEALS:2011-09-15
Has Version(s):
Identifier in Online Catalog:323909
OCLC Identifier:(OCoLC)ocm05133608

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