A rational expectations model of the U.K. under floating exchange rates

Minford, Anthony Patrick Leslie ORCID: https://orcid.org/0000-0003-2499-935X, Brech, M. and Matthews, Kent Gerard Patrick ORCID: https://orcid.org/0000-0001-6968-3098 1980. A rational expectations model of the U.K. under floating exchange rates. European Economic Review 14 (2) , pp. 189-219. 10.1016/0014-2921(80)90018-5

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Abstract

This paper constructs a model of an open economy with both trade and capital flows. Private sector wealth holders are assumed to be concerned with balance sheet ratios as in a portfolio choice theoretic model. Rational expectations in the strict Muth sense is introduced via the asset allocation decision by the private sector. International trade and capital flows are treated as in the monetary theory of the balance of payments. The model is constructed for the U.K. economy and simulation and forecasting exercises are conducted for the floating period.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance
Publisher:	Elsevier
ISSN:	0014-2921
Last Modified:	24 Oct 2022 11:45
URI:	https://orca.cardiff.ac.uk/id/eprint/49226

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