The paper evaluates the implications for the conduct of monetary, fiscal, and financial policy of the rational expectations revolution in macroeconomics. It concludes that some important policy conclusions derived from conventional eclectic neo-Keynesian models remain valid when rational...

The paper uses a small analytical two-region model (the Mundell-Dornbusch model, as first adapted by Marcus Miller), consisting of the United States and the rest of the industrial world, to analyze three issues concerning international economic interdependence and macroeconomic policy...

The paper reviews the channels of macroeconomic interdependence under flexible exchange rates. The model emphasizes the linkage of international capital markets, expectations, and nominal and real wage stickiness in affecting the impact of disturbances on employment, prices, and the exchange...

This paper studies budgetary, financial, and monetary policy evaluation and design using a comprehensive wealth or permanent income accounting framework. A set of stylized balance sheets and permanent income accounts is constructed for the public, private, and overseas sectors. These are then...