Welcome to the Matrix, Mundell and Fleming

krokodilizm

New member
Joined
Feb 12, 2016
Messages
0
Reaction score
0
I have come up with an algorithm to quickly predict currency movements in the above mentioned model. I have used the following conventions:
  • A positive (+) denotes high mobility, expansionary policy and appreciating currency.
  • A negative (-) denotes low mobility, contractionary policy and depreciating currency.
This is one of the cases that I would rather automate my answer than engage in active thinking to decide the chain of events, which is a big drain of stamina. This won’t take longer than a minute and you might as well relax a moment while your “hand answers the question for you”.
 
You have:
  • A negative (-) denotes low mobility, contractionary policy and depreciating currency.
And then you say:
” In a contractionary M there can only be a currency appreciation and vice versa”
Am I missing something?
 
brklyn wrote:
You have:
  • A negative (-) denotes low mobility, contractionary policy and depreciating currency.
And then you say:
” In a contractionary M there can only be a currency appreciation and vice versa”
Am I missing something?
Contractionary M is denoted by “-M” column. What I mean is underneath that column the cells are labelled “+” to complete the table. Check the yellow cells in Step 3 and see their relationship with the column headers…
 
brklyn wrote:
I like the way you think.
What does F stand for?
F=fiscal policy
M=monetary policy
This may look odd at first but the information is really basic and there is nothing new to learn. Just a mnemonic of sorts.
The reason I did not fully label the columns and rows is because it takes time to write down the words monetary and fiscal at least six times.
 
Back
Top