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

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Abstract

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.

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Authors and Affiliations

  1. Trinity College, University of Toronto, Canada

    Joseph P. Daniels

  2. College of Business Administration, Marquette University, Straz Hall, P.O. Box 1881, Milwaukee, WI, 53201. E-mail

    Joseph P. Daniels

  3. College of Commerce and Business Administration, University of Alabama, Box 870224, Tuscaloosa, AL, 35487-0224. E-mail

    David D. VanHoose

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  1. Joseph P. Daniels
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Daniels, J.P., VanHoose, D.D. Two-Country Models of Monetary and Fiscal Policy: What Have We Learned? What More Can We Learn?. Open Economies Review 9, 265–284 (1998). https://doi.org/10.1023/A:1008220801959

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