Open-Economy National Income Accounting ...
Warnock, Francis E...
Open-Economy National Income Accounting and the IS/LM Model
Warnock, Francis E.; Murphy, Daniel
GEM-0128 | Published December 17, 2015 | 14 pages Technical Note
Collection: Darden School of Business
Product Details
When we introduce macroeconomic models, we assume that goods and services are exchanged within a single country but not across countries. This assumption is useful for understanding some of the primary determinants of output, inflation, and interest rates. In reality, however, economies trade with each other, and the presence of international markets has implications for national economies. In this note, we incorporate international markets to understand how changes in one country can affect other countries.
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