Exchange rate flexibility and macroeconomic policy in Finland

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Title: Exchange rate flexibility and macroeconomic policy in Finland
Author: Halttunen, Hannu
Organization: Suomen Pankki
Series: Suomen Pankki. B = Bank of Finland. B
Series number: 35
Year of publication: 1980
Publication date: 1.10.1980
Pages: 189
Subject (yso): ulkomaankauppa; valuuttakurssit; rahapolitiikka; taloudelliset mallit; hinnat
Table of contents: CHAPTER I INTRODUCTION 7 1. Purpose of the Study 11 2. Outline of the Study 12 CHAPTER II TRADE AND FLEXIBLE EXCHANGE RATES IN THE WORLD ECONOMY 18 1. Introduction 18 2. International Trade in the Model 23 2. 1. Imports 23 2. 2. Exports 27 2. 3. Export Prices 32 2. 4. Import Prices 38 2. 5. Current Account Equation 38 2. 6. The Effect of Import Prices on the Domestic Price Level 40 3. Exchange Rate Determination in the Model 43 4. Interaction of Trade and Exchange Rates 50 4. 1. Assumptions behind the Simulations 52 4. 2. Effects of Interaction of Trade and Exchange Rates 55 4. 3. Effects of Alternative Growth Rates 61 5. Summary and Conclusions 64 CHAPTER III THE EFFECTS OF EXCHANGE RATE POLICY AND OTHER MACROECONOMIC POLICY ACTIONS IN A SMALL OPEN ECONOMY: THE CASE OF FINLAND 66 1. Introduction 66 1. 1. Some Basic Characteristics of the Macroeconomics of the Small Open Economy 67 1. 2. The Basic Approach 71 2. Structure of the Model 76 2. 1. Money and Aggregate Commodity Demand 76 2. 2. Aggregate Commodity Supply 83 2. 3. Price Determination 84 2. 4. Public Sector 91 2. 5. Banking Sector 93 2. 6. Potential Output and Capacity Utilization 94 2. 7. Other Equations of the Model 95 3. Empirical Estimation of the Model 97 4. Performance of the Model in the Sample Period 115 4. 1. Control Solution 116 4. 2. Effects of Monetary Policy 121 4. 3. Effects of Fiscal Policy 125 4. 4. Effects of a Shift in International Demand 129 4. 5. Effects of Exchange Rate Policy under Alternative Monetary Assumptions 130 4. 6. Summary and Conclusions of the Simulation Results 139 5. The Performance of the Model outside the Sample Period 141 5. 1. The Performance of the Finnish Economy after the First Oil Crisis: A Reconsideration 142 5. 1. 1. Control Solution for the Period 1974 - 1979 145 5. 1. 2. Effects of a 10 Per Cent Revaluation in 1974 - 1979 149 5. 2. An Illustration of Alternative Exchange Rate Policy Rules 154 5. 2. 1. The Reference Simulation 154 5. 2. 2. Effects of Alternative Exchange Rate Rules with Oscillating International Prices 158 CHAPTER IV SUMMARY AND CONCLUSIONS 161 REFERENCES 167 DATA APPENDIX FOR CHAPTER II 181
Rights: https://helda.helsinki.fi/bof/copyright


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