De Economist

, Volume 130, Issue 2, pp 264–282 | Cite as

Monetary policy in an open economy with private debt: Another variation on theIS/LM theme

  • H. Visser


In this article an amended vesion of the traditionalIS/LM-model for an open economy is developed. TheLM-curve is replace by anFM-curve, which represents equilibrium between the demand for and supply of money and bonds. The banks passively satisfy the wishes of the public as to the composition of its portfolio of money and bonds, creating or destroying money in the process. It turns out that not much is left of the well-orderedIS/LM world.


Monetary Policy International Economic Open Economy Public Finance Private Debt 
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Copyright information

© Kluwer Academic Publishers 1982

Authors and Affiliations

  • H. Visser
    • 1
  1. 1.Free UniversityAmsterdam

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