Abstract
This chapter presents a relatively simple macroeconomic model that is relevant to developing countries. It is designed to capture the short-run relationship between the excess demand or supply of money and key economic variables. Specifically, the model attempts to analyze both the relationship between changes in the foreign sector and the monetary variables in the economy, as well as the relationship between changes in these monetary variables and the domestic demand for goods which induces further changes in the foreign sector. It further makes a distinction between money of domestic origin and money of foreign origin, and attempts to determine the effect of monetary policy, defined in terms of variations in domestic credit, on changes in the stock of international reserves. The chapter discusses the individual equations that make up the model and also how the model operates.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Money and Monetary Policy in Less Developed Countries
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
