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Emerging Asia’s Version of the Mundell-Fleming Model
Economics Department, Faculty of Economics and Administration, University Malaya, Kuala Lumpur, Malaysia
- 1 Economics Department, Faculty of Economics and Administration, University Malaya, Kuala Lumpur, Malaysia
- 2
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Abstract
This paper explains the Mundell - Fleming model in the context of Emerging Asia economies management of capital mobility. Central Banks and Financial Regulators in Emerging Asia adopt a modified version of the model that inc o rporates two vital levers, a policy driven and a market driven method that is adaptable to the magnitude of capital flow. A policy combination mix of both policy and market driven provides smooth monetary policy signal transmission to exchange rates.
KeywordsMundell-Fleming ModelCapital MobilityForeign Exchange MarketsMonetary PolicyEmerging Asia
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