Analysis of Fiscal, Monetary, and Exchange Rate Articles

Background and Data: The alliance is a political union in Sweden that currently holds the authority of the government. The Social Democratic Party has dominated the Swedish government for more than 70 years; they have worked at the government for nine years since 1932. The opposition parties have decided that they never won the elections during these years due to the fact that they have not proposed a clear and valued alternative government. At the meeting of the central party leader Maud Olofsson at the home of the Högfors village, the leaders of the four parties decided to enter an alliance.

Robert Mundell is a Canadian economist who won the Nobel economic award in 1999. Because he analyzed monetary policy and fiscal policy under different exchange rates and analyzed the best currency field. Basically, this guy lives and sucks the world of currency exchange. When Canada changed its exchange rate in the 1960s, he was fascinated by the world. In order to investigate the effect of floating exchange rate, he cooperated with Marcus Fleming and proposed the Mundell-Fleming exchange rate model. The model's theorem depends on the so-called impossible impossibility key to the Trinity. Impossibility Trinity shows that there are three main ways in each country to cope with financial conditions, whether free capital flows, fixed exchange rates, or monetary policy independence.

In the first half of the review of literature we will explain how to implement financial and fiscal policies under a flexible exchange rate regime and the latter half will analyze how to implement financial and fiscal policies under a flexible exchange rate regime. In the last part of the literature review, we will explain the Phillips curve according to the above policy. This section demonstrates the impact of fiscal policy on the UK economy using the IS-LM BP model. Extended fiscal policies include increasing government expenditure or lowering taxes. At any interest rate, if government expenditure increases, total demand will increase