Macrodynamics and Pollution in Open Economy: An IS‐LM Analysis

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Ouyahia Emmanuel

Abstract

The economy of the environment is traditionally the field of micro‐economy. Yet Pro‐ viding an analysis purely macro‐economic is from a theoretical and praxeological point of view    possible. With this in mind, we change the model IS‐LM so that it incorporates the pollution. This extension of the model has allowed us to show the ecological and economic effects of different monetary or budgetary policies depending on the type of small open economy considered (with or without different kind of control pollution activities).

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References

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