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In economics, the Mundell-Fleming model is an extension of the IS-LM model. Whereas IS-LM deals with economy under autarky, the Mundell-Fleming model tries to describe a small open economy.
It is worth noting that some of the result from this model differs from the IS-LM because of the open economy assumption. Result for large open economy on the other hand falls within the result predicted by the IS-LM and the Mundell-Fleming models. The reason for such result is because a large open economy has both the characteristics of an autarky and a small open economy.
This model was first set forth by Robert Mundell and Marcus Fleming. The two worked separately however, with each of them publishing a series of independent papers in the 1960s.
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