The Impact of Internet Finance in an Open Economy

The issue of Internet fmance system has been a matter of hot debate among academics and policymakers. The purpose of this paper is to explore the implications of Internet finance for the effects of an open economy. While lots of papers may be empirically more relevant, this paper seems to be theoretically more interesting. The small open economy model is applied in this study. The outcome shows that the widespread use of Internet fmance has a positive increase effect on the national income in the open economy. Besides, it is also discovered that Internet fmance has an ambiguous effect on the domestic interest rate and foreign exchange rate in the small open economy.