01777cas a2200241 a 4500 AALejournalIMF010015 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451956030 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. Money Versus Credit in the Determination of Output for Small Open Economies. Washington, D.C. : International Monetary Fund, 1989. 1 online resource (32 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students It is well known that in a small open economy where there is perfect substitutability between domestic and foreign assets and costless portfolio adjustment, the monetary authorities cannot control the money supply, but can influence the balance of payments through the use of domestic credit. It has been argued that domestic credit is therefore the relevant variable in output determination as well. However, this paper demonstrates, using a 'new classical' structural model, that under the conditions that render the money supply uncontrollable, neither money nor domestic credit affects output. If either has a significant effect in empirical tests, it implies that the assumption of perfect capital mobility is not satisfied. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1989/078 Full text available on IMF http://elibrary.imf.org/view/journals/001/1989/078/001.1989.issue-078-en.xml IMF e-Library