Inventories in the open economy macro model: A disequilibrium analysis

Michael Moore*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

This study examines a disequilibrium model of a small open economy with explicit links between periods due to inventory accumulation, as well as the more conventional channels through current account imbalances and the government budget constraint. The key features of the model are that agents have perfect foresight with neutral public debt and that inventorieş adjust to smooth production intertemporarily. The paper explores the extent to which fiscal policy can be used selectively for coping with an export slump without running into a balance of payments constraint.

Original languageEnglish (US)
Pages (from-to)157-162
Number of pages6
JournalReview of Economic Studies
Volume56
Issue number1
DOIs
StatePublished - Jan 1 1989

ASJC Scopus subject areas

  • Economics and Econometrics

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