Loungani, Prakash; Razin, Assaf; Yuen, Chi-Wa - Federal Reserve Board (Board of Governors of the … - 1997
Our paper analyses the effects of restrictions on capital mobility on the output-inflation tradeoff. Using a stochastic version of the Mundell-Fleming model, we establish a theoretical presumption that an increase in restrictions on capital mobility should make the tradeoff parameter smaller,...