Neo-Keynesian Macroeconomics in an Open Economy**Earlier versions of this paper were presented at the IAUTE Annual Conference, Renvyle, April 1986, at the CEPR-University of Manchester Conference on Developments in Disequilibrium Macroeconomics, April 1986, at the Conference on International Economics at the Norwegian School of Economics and Business Studies, Bergen, May 1986 and to seminars at the University of Maryland and at Trent University, Peterborough, Ontario. Research assistance from Gabrielle Doyle and comments from Patrick Honohan, Jack Mintz and Sweder van Wijnbergen are gratefully acknowledged.