nitinsiwach
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- Jun 18, 2026
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Schweser notes book 1
page 288(under mundell-fleming model) —- changes in inflation rates due to changes in monetary/fiscal policy are not explicitly modeled by the mundel fleming model.
page 290(monetary models first line) — with the mundell-fleming model we assume that indlation ( price levels) play no role in exchange rate determination.
page — 289 (under high capital mobility) Expansionary fiscal policy will also increase economic activity ( growth) and inflation leading ot a deterioration of the current account and a decrease in demand of the domestic currency.
Can anyone explain how is this?? when first two things state that inflation is not considered a factor by the mundell-fleming model how can they use the same in the mundel fleming model to model the exchange rate for the same
page 288(under mundell-fleming model) —- changes in inflation rates due to changes in monetary/fiscal policy are not explicitly modeled by the mundel fleming model.
page 290(monetary models first line) — with the mundell-fleming model we assume that indlation ( price levels) play no role in exchange rate determination.
page — 289 (under high capital mobility) Expansionary fiscal policy will also increase economic activity ( growth) and inflation leading ot a deterioration of the current account and a decrease in demand of the domestic currency.
Can anyone explain how is this?? when first two things state that inflation is not considered a factor by the mundell-fleming model how can they use the same in the mundel fleming model to model the exchange rate for the same