Economics has been labeled as some sort of a discipline that predicts the future. The application of various models and efforts at testing its various hypotheses that sometimes result in the affirmative may have contributed to that reputation but it is not about predicting the future. Rather, it is about finding lessons from the past, […]

In November 2006, I mentioned how the Mundell-Fleming model works by applying it to the then-current economic situation in Malaysia. Among many points that were mentioned in that post is the connection between government spending and net export. The rationale is, greater government spending drives up the interest rate and encourage capital inflow, which later, […]