Bofinger, Peter; Mayer, Eric; Wollmershäuser, Timo - In: The Journal of Economic Education 40 (2009) 1, pp. 80-102
For the open economy, the workhorse model in intermediate textbooks still is the Mundell-Fleming model, which basically extends the investment and savings, liquidity preference and money supply (IS-LM) model to open economy problems. The authors present a simple New Keynesian model of the open...