EViews macros for building models in
Wynne Godley and Marc Lavoie
Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth

Table of contents Chapter 12 Notes on EViews version Notation Copyright Comments Guestbook

Chapter 12. A More Advanced Open Economy Model

Model OPENFIX - Model OPENFIXR - Model OPENFIXG - Model OPENFLEX

Model OPENFIX

Chapter 12 extends model OPEN from Chapter 6, allowing for trade in financial assets, accumulation of foreign reserves, and different exchange rate regimes.
Model OPENFIX is a first version of a fixed exchange rate regime, with endogenous foreign reserves.

Download: gl12openfix (Eviews 5 to 8) or gl12openfix_v4 (Eviews 4.1)

Download the macro above to generate a baseline solution, and run the first experiment: an increase in the US propensity to import.

Monetary Economics Figure 12.1a

Model OPENFIXR

In model OPENFIXR the interest rate of one of the two countries is made endogenous.

Download: gl12openfixr (Eviews 5 to 8) or gl12openfixr_v4 (Eviews 4.1)

Download the macro above to generate a baseline solution, and run the second experiment: an increase in the UK propensity to import.

Monetary Economics Figure 12.2a  Monetary Economics Figure 12.2b

Model OPENFIXG

In model OPENFIXG the interest rates are again both exogenous, as in model OPENFIX, but one of the countries adjust its government expenditure to offset shocks to its trade balance.

Download: gl12openfixg (Eviews 5 to 8) or gl12openfixg_v4 (Eviews 4.1)

Download the macro above to generate a baseline solution, and run the third and fourth experiments: an increase in the US propensity to import, and an increase in the propensity to import offset by a devaluation.

Monetary Economics Figure 12.3b

Model OPENFLEX

Model OPENFLEX has flexible exchange rates.

Download: gl12openflex (Eviews 5 to 8) or gl12openflex_v4 (Eviews 4.1)

Download the macro above to generate a baseline solution, and run the fifth, sixth and seventh experiments: a decrease in the UK propensity to export, an incrase in UK real government expenditure and an increase in the desire to hold US government bills.

Monetary Economics Figure 12.5A  Monetary Economics Figure 12.5D
Monetary Economics Figure 12.7D