IMF’s Gopinath rewrites classic open-economy model

Mundell-Fleming model’s assumptions make it less useful for modern policy-making, economist says

Gita Gopinath
Gita Gopinath
IMF/Joshua Roberts

The International Monetary Fund’s Gita Gopinath proposed a redesigned version of the classic model of open-economy macroeconomics in remarks on January 7.

The IMF deputy managing director said the model – originally developed by IMF economists Robert Mundell and Marcus Fleming in the 1960s – was “beautiful” for its simplicity. Partly for this reason, it is still taught to undergraduates today, and tends to be a model that policy-makers use to frame their thinking. Mundell won a Nobel prize for

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