De Economist

, Volume 127, Issue 1, pp 143–186 | Cite as

The impact of the exchange rate system on the effectiveness and implementation of stabilization policy in The Netherlands

  • H. Jager


An economic model is presented with as the most important features a parameter indicating the exchange rate flexibility, the splitting of the internal objective into domestic output and the average price level, the distinction between the price of domestic production and the average price level, and the price indexation of nominal wages. The stability conditions of this model are developed. Based on a qualitative analysis the directions of the impact of policy instruments on objectives are determined and used for obtaining rules and conditions for stable (de)centralized policies under fixed and managed floating exchange rates. These are confronted with empirical results about Dutch adjustment policy.


Exchange Rate Stability Condition Empirical Result Rate System International Economic 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Black, S. W.,Floating Exchange Rates and National Economic Policy, New Haven and London, 1977.Google Scholar
  2. Branson, W. H. and J. M. Litvack,Macroeconomics, New York, 1976.Google Scholar
  3. Casas, R. R., ‘Efficient Macroeconomic Stabilization Policies under Floating Exchange Rates,’International Economic Review, XVI (1975), pp. 682–698.Google Scholar
  4. Dernberg, T. F. and J. D. Dernberg,Macroeconomic Analysis, An Introduction to Comparative Statics and Dynamics, Reading (Mass.), 1969.Google Scholar
  5. Dixon, D. A., ‘Techniques of Fiscal Analysis in the Netherlands,’I.M.F. Staff Papers, XIX (1972), pp. 615–646.Google Scholar
  6. Dornbusch, R., ‘The Theory of Flexible Exchange Rates Regimes and Macroeconomic Policy,’Scandinavian Journal of Economics, LXXVIII (1976), pp. 255–276.Google Scholar
  7. Fleming, J. M., ‘Domestic Financial Policies under Fixed and Floating Exchange Rates,’I.M.F. Staff Papers, IX (1962). Reprinted in R. N. Cooper (ed.),International Finance, Harmondsworth, 1969, pp. 291-304.Google Scholar
  8. Hicks, J. R.,Value and Capital, (second edition), London, 1946.Google Scholar
  9. Hildebrand, D. K., J. D. Laing and H. Rosenthal, ‘Prediction Analysis in Political Research,’The American Political Science Review, LXX (1976), pp. 502–535.Google Scholar
  10. Holtrop, M. W.,Money in an Open Economy, Leiden, 1972.Google Scholar
  11. Jager, H., ‘The Global Monetaristic Variant of the Monetary Approach to the Balance of Payments: An Empirical Study of The Netherlands,’De Economist, CXXVI (1978), pp. 342–369.Google Scholar
  12. Johnson, H. G., (1966), ‘Some Aspects of the Theory of Economic Policy in a World of Capital Mobility,’ in T. Bagiotti (ed. ),Essays in Honour of Marco Fanno, Padova, 1966. Reprinted in H. G. Johnson,Further Essays in Monetary Economics, London, 1972, pp. 151–166.Google Scholar
  13. Johnson, H. G., (1972),Further Essays in Monetary Economics, London, 1972.Google Scholar
  14. Korteweg, P., ‘Inflation, Economic Activity and the Operation of Fiscal, Foreign and Monetary Impulses in The Netherlands - A Preliminary Analysis, 1953-1973,’De Economist, CXXIII (1975), pp. 559–637.Google Scholar
  15. Mundell, R. A., ‘Capital Mobility and Stabilization Policy under Fixed and Flexible Exchange Rates,’Canadian Journal of Economics and Political Science, XXIX (1963), pp. 475-485. Reprinted in R. E. Caves and H. G. Johnson (eds.),Readings in International Economics, London, 1968.Google Scholar
  16. De Nederlandsche Bank,Annual Report for 1973, Amsterdam, 1974. Neumann Whitman, M. von, ‘Policies for Internal and External Balance,’Special Papers in International Economics, No. 9, Princeton, 1970.Google Scholar
  17. Niehans, J., ‘Monetary and Fiscal Policies in Open Economies under Fixed Exchange Rates: An Optimizing Approach,’The Journal of Political Economy, LXXVI (1968), pp. 893–943.Google Scholar
  18. Patinkin, D.,Money, Interest and Prices, (second edition), New York, 1965.Google Scholar
  19. Patrick, J. D., ‘Establishing Convergent Decentralized Policy Assignment,’Journal of International Economics, III (1973), pp. 37–52.Google Scholar
  20. Quirk, J. and R. Saposnik (1968),Introduction to General Equilibrium Theory and Welfare Economics, New York, 1968.Google Scholar
  21. Samuelson, P. A.,Foundations of Economic Analysis, New York, 1965.Google Scholar
  22. Shinkai, Y., ‘Stabilization Policies in an Open Economy: A Taxonomic Discussion,’International Economic Review, XVI (1975), pp. 662 681.Google Scholar
  23. Takayama, A.,Mathematical Economics, Hinsdale (Ill.), 1974.Google Scholar
  24. Takayama, A., ‘The Wealth Effect, the Capital Account and Alternative Policies Under Fixed Exchange Rates,’The Quarterly Journal of Economics, LXXXXII (1978), pp. 117–147.Google Scholar
  25. Szász, A., ‘Monetary Policy and Exchange Rate Stability,’ in G. Maynardet. al.,Monetary Policies in Open Economies, Tilburg, 1978.Google Scholar
  26. Tower, E. and T. D. Willett, ‘The Theory of Optimum Currency Areas and Exchange Rate Flexibility,’Special Papers in International Economics, No. 11, 1976Google Scholar
  27. Turnovsky, S. J.,Macroeconomic Analysis and Stabilization Policy, Cambridge, 1977.Google Scholar

Copyright information

© Kluwer Academic Publishers 1979

Authors and Affiliations

  • H. Jager
    • 1
  1. 1.University of GroningenThe Netherlands

Personalised recommendations