The Mundell-Fleming model Crucial assumption soe >r=r Components of the model Y=C(Y-D+l(r)+G+ nX(e) M/P=L(, YThe Mundell-Fleming Model ◼ Crucial assumption: SOE → r = r* ◼ Components of the model Y = C (Y-T) + I (r*) + G + NX (e) M/P=L (r, Y) r = r*