Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/230467
Authors: 
Hashimoto, Ken-ichi
Ono, Yoshiyasu
Year of Publication: 
2019
Series/Report no.: 
ISER Discussion Paper No. 1061
Abstract: 
We develop an aggregate demand analysis of a small open economy based on all agents' dynamic optimization. Murota and Ono (2015) present a simple Keynesian cross analysis with dynamic optimization. This paper extends it to a small-country setting with two factors and two commodities, of which the structure is as simple as the conventional Keynesian cross analysis. We apply the model to examine the effects of changes in various parameters, such as the terms of trade, foreign asset holdings and government purchases, on aggregate demand. They are quite different from those under full employment and those of the Mundell-Fleming model.
Subjects: 
aggregate demand shortage
unemployment
small open economy
JEL: 
E12
E13
E21
E24
F32
F41
Document Type: 
Working Paper

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