mundell_flemming_intro.py

Created on March 31, 2024

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IS-LM-BP Model

The MF model consists of four
elements
  
1.the goods market equilibrium 
condition for the home economy
(ISXM curve)

2.the money market equilibrium
for the home economy 
(LM curve)

3.the financial market 
arbitrage or uncovered 
interest parity condition 
(UIP curve)

4.the condition for financial
integration are when 
expectation are fulfilled in 
the foreign exchange market 
=i=i* line

Short-run equilibrium is 
when the goods market 
is in equilibrium and 
where the exchange 
rate is not expected to 
change. The model can be 
used to analyse policy 
choices by the home 
government and also the 
implications of the 
implications of a change in
economic conditions 
emanating from the 
rest of the world

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mundell_flemming_intro.py