Open Economies Review

, Volume 9, Issue 3, pp 265–284 | Cite as

Two-Country Models of Monetary and Fiscal Policy: What Have We Learned? What More Can We Learn?

  • Joseph P. Daniels
  • David D. VanHoose


This paper surveys the literature that uses two-country models to analyze monetary and fiscal policy issues faced in interdependent economies. We discuss sources of structural interdependence that researchers typically include in these models. We describe many of the types of policy interactions that researchers have considered and summarize the key results that they have obtained. Finally, we briefly explain the limitations of two-country models and outline directions that this literature might usefully be extended.

two-country models monetary policy coordination fiscal policy coordination 


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Copyright information

© Kluwer Academic Publishers 1998

Authors and Affiliations

  • Joseph P. Daniels
    • 1
    • 2
  • David D. VanHoose
    • 3
  1. 1.Trinity College, University of TorontoCanada
  2. 2.College of Business AdministrationMarquette UniversityMilwaukee
  3. 3.College of Commerce and Business AdministrationUniversity of AlabamaTuscaloosa

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