International macroeconomics has been an area of research activity during the last two decades and Turnovsky has made a central contribution to the area in both theory and policy. This volume, which presents a selection of his most significant work, is intended to develop analytical approaches and modelling strategies applicable to a variety of issues in international macroeconomics. The first part of the book reviews the development of analytical models, beginning with the Mundell-Fleming and Dornbusch sticky-price models. Turnovsky goes on to consider more recent stochastic rational expections models and those directed at deriving macroeconomic equilibrium relationships from optimizing behaviour. The second part of the book deals with policy, specifically exchange market intervention, strategic policy making and policy coordination.
Stephen J Turnovsky is a graduate of Harvard University and currently Professor of Economics at the University of Washington. He was previously a member of the faculties of the University of Pennsylvania, University of Toronto, Australian National University, and the University of Illinois at Urbana-Champaign. He is the author of "Macroeconomic Analysis and Stabilization Policy "and has written extensively ona wide variety of topics in macroeconomic theory and policy. From 1981 to 1987 he was Editor of the "Journal of Economic Dynamics and Control. "Professor Turnovsky has served on the editorial boards of the I"nternational Economic Review, "and "Journal of Money, Credit and Banking, "and the "Journal of Public Economics."
Part 1 Sticky price models: the stability of exchange rate dynamics under perfect myopic foresight; covered interest parity, uncovered interest parity and exchange rate dynamics; short-term and long-term interest rates in a monetary model of a small open economy; monetary and fiscal policy under perfect foresight - a symetric two country analysis. Part 2 Stochastic models: monetary policy and foreign price disturbances under flexible exchange rates - a stochastic approach; effects of monetary disturbances on exchange rates with risk averse speculation. Part 3 Exchange market intervention and wage indexation: exchange market intervention politics in a small open economy; wage indexation and exchange market intervention in a small open economy; optimal monetary policy and wage indexation under alternative disturbances and information structures; risk, exchange market intervention and private speculative behaviour in a small open economy. Part 4 Intertemporal optimizing models: domestic and foreign disturbances in an optimizing model of exchange rate determination; tariffs, capital accumulation and the current account in a small open economy. Part 5 Strategic aspects of policy making: monetary policies in interdependent economies with stochastic disturbances - a strategic approach; dynamic strategic monetary policies and coordination in interdependent economics; the gains from fiscal cooperation in the two-country real trade model.