Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/277308 
Year of Publication: 
2014
Citation: 
[Journal:] European Journal of Economics and Economic Policies: Intervention (EJEEP) [ISSN:] 2052-7772 [Volume:] 11 [Issue:] 3 [Year:] 2014 [Pages:] 269-299
Publisher: 
Edward Elgar Publishing, Cheltenham
Abstract: 
We present an open economy growth model, using Stock-Flow Consistent (SFC) methodology. Our contribution is to add the possibility of one country issuing debt denominated in another country's currency, as well as allowing its firms to borrow from foreign banks. We investigate the effects and interactions that these features have on trade and financial flows, income distribution, foreign debt, and fiscal and monetary policy. Our results point towards the dismissal of the 'twin deficit' view, and support an active management of the exchange rate, in light of contradictory effects of fixed and flexible exchange rate regimes, according to the circumstances.
Subjects: 
Stock-Flow Consistent models
exchange rate policy
income distribution
twin deficits
external debt
JEL: 
E12
E24
E31
E44
F32
F43
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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