ABSTRACT
In this chapter we consider a num ber of aspects of the perfect capital mobility version of the SPMA model introduced in the previous chapter. We are therefore, for the m oment, sidestepping some of the issues raised towards the end of that chapter regarding this type of model. However, this is worthwhile because a number of interesting issues can be discussed using the SPMA model’s relatively simple structure; indeed the SPMA model has become one of the basic building blocks of open economy macro-models.
