| Summary: | 碩士 === 逢甲大學 === 經濟學所 === 94 === While facing the economic problems, the government adopts not only the monetary policy, but also the fiscal policy to drive the economy up. However, the policy could be unanticipated, anticipated , or uncertain (such as the ambiguous amount of money supply or fiscal spending), that would make the effect of the government policy different. In this thesis, we attempt to amend Dornbusch’s Model (1976), assuming capital mobility is imperfect and the demand of investment is a function of the real interest rate, so we can establish an open economy model including a product market ,a money market and a foreign exchange market .We can explore the change of macro economy when government use the expansion monetary policy or fiscal policy while the government policy is anticipated, unanticipated, or uncertain.
According our research, we can get the conclusions as following:
1. When the government announces and implements simultaneously the expansionary policy , the direction of the exchange rate to adjust will depend on the relative size of price effect to interest rate effect and the degree of capital mobility.If the degree of capital mobility is larger, it is more possible that the exchange rate overshoots in the short run while the expansion monetary policy is adopted . The product price rises gradually to the new equilibrium level after the moment of policy announcement.
2. When the government announces to adopt the expansion policy in the future , the exchange rate jumps instantaneously. Then it may increase or decrease that is determined by the relative size of price effect and the degree of capital mobility.
3. When the government announces to increase the amount of money supply or fiscal spending, but the amount is ambiguous. If the actual amount of money supply or fiscal spending is not the same as people expected, then the exchange rate will jump again while the policy is executed.
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