How would a new gold standard contribute to macroeconomic stability in emerging economies with international financial capital inflows into their capital structures? Gold could be seen as a financial asset, but what is the essential characteristic of the gold standard as monetary regime? Consider the capital structure and heterogeneous capital. How would capital inflows influence domestic capital structures? How would the capital structure develop when there is a positive effect on productivity growth? What is required for macroeconomic stability? Consider capital-based macroeconomics and convertibility as monetary regime. What lessons can be drawn from the interwar gold-exchange standard? Can we return to convertibility? Use the course readings to analyze macroeconomic stability in emerging economies with international capital inflows under a new gold
IS-LM-PC Analysis
The IS (Investment Saving), LM (Liquidity Preference- Money Supply), and PC (Philips Curve) is the model that looks at the dynamics of output and inflation. It takes into account the central bank policy decision to adjust the inflation and real interest rate in the economy. It enables the economist to weather to priorities between employment and inflation rate analyzing the model. It is a practice-driven approach adopted by economists worldwide.
IS-LM Analysis
The term IS stands for Investment, Savings, and LM stands for Liquidity Preference, Money Supply. Therefore, the term IS-LM model is known as Investment Savings – Liquidity preference money Supply. This model was introduced by a Keynesian macroeconomic theory which shows the relationship between the economic goods market and loanable funds market or money market. In other words, it shows how the market for real goods interacts with the financial markets to strike a balance between the interest rate and total output in the macroeconomy. This particular model is designed in the form of a graphical representation of the Keynesian economic theory principle. The output and money are the two important factors in an economy.
How would a new gold standard contribute to macroeconomic stability in emerging economies with international financial capital inflows into their capital structures?
Gold could be seen as a financial asset, but what is the essential characteristic of the gold standard as monetary regime? Consider the capital structure and heterogeneous capital. How would capital inflows influence domestic capital structures? How would the capital structure develop when there is a positive effect on productivity growth? What is required for macroeconomic stability? Consider capital-based
Course Readings:
Artus, Patrick, Andr Cartapanis and Florence Legros (ed.), (2005), Regional Currency Areas in Financial Globalization, Cheltenham: Edward Elgar.
Bailliu, Jeaninne N., (2000), “Private Capital Flows, Financial Development, and Economic Growth in Developing Countries”, Bank of Canada Working Paper 2000-15, http://www.bankofcanada.ca/publications/working.papers/2000/wp00-15.pdf.
Eichengreen, B. (2008). Globalizing Capital: A History of the International Monetary System, Second Edition, Princeton, NJ: Princeton University Press.
Garrison, Roger W., (2001), Time and Money: The Macroeconomics of Capital Structure, London and New York: Routledge.
Horwitz, Steven, (2000), Microfoundations and Macroeconomics: An Austrian Perspective, London and New York: Routledge.
Huerta de Soto, Jes s, (2006), Money, Bank Credit, and Economic Cycles, Auburn, AL: Ludwig von Mises Institute.
Leijonhufvud, Axel, (2000), Macroeconomic Instability and Coordination: Selected Essays of Axel Leijonhufvud, Cheltenham:Edward Elgar.
Lewin, Peter, (1999), Capital in Disequilibrium: The Role of Capital in a Changing World, London and New York: Routledge.
Yeager, Leland B., (1976), International Monetary Relations: Theory, History, and Policy, Second Edition, New York: Harper and Row.
Yeager, Leland B., (1997), The Fluttering Veil: Essays on Monetary Disequilibrium, George Selgin (ed.), Indianapolis: Liberty Fund
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