版权说明:本文档由用户提供并上传,收益归属内容提供方,若内容存在侵权,请进行举报或认领
文档简介
AnIntroductiontoInternationalEconomics
SecondEditionAutomaticAdjustmentswithFlexibleandFixedExchangeRatesCHAPTERTHIRTEEN1FocusofthechapterHowisatradedeficitautomaticallyclosedbypriceandincomechanges?Inthischapterprivateinternationalcapitalflowsareassumedtobepassiveresponsestocovertemporarytradeimbalances.2ExchangerateadjustmentAssume(1)onlytwonations(theU.S.andEMU)and(2)nocapitalflows.UndertheseassumptionsthedemandforeurowillbedrivenbyU.S.demandforEMUgoodsandservices,orimports.€/day$/€D€3ExchangerateadjustmentAssume(1)onlytwonations(theU.S.andEMU)and(2)nocapitalflows.UndertheseassumptionsthedemandforeurowillbedrivenbyU.S.demandforEMUgoodsandservices,orimports.
ThesupplyofeurowillbedrivenbyEMUdemandforU.S.goodsandservices,orexports.€/day$/€D€S€4ExchangerateadjustmentIftheexchangerateisatlevelA,theU.S.willhaveatradedeficit.€/day$/€D€S€A5ExchangerateadjustmentIftheexchangerateisatlevelA,theU.S.willhaveatradedeficit.IfexchangeratesintheU.S.areflexible,overtimetheexchangeratewillmovetoitsequilibriumvalueofB.€/day$/€ABD€S€6ExchangerateadjustmentIftheexchangerateisatlevelA,theU.S.willhaveatradedeficit.IfexchangeratesintheU.S.areflexible,overtimetheexchangeratewillmovetoitsequilibriumvalueofB.AstheexchangerateadjuststoB,thetradedeficitwillclose.€/day$/€ABD€S€7ExchangerateadjustmentIfinsteadoftheoriginalsupplyanddemandcurves,supplyanddemandaregivenbyS€
*andD€
*,adepreciationofthedollarwillstilloccur.However,thedepreciationwillbemuchgreaterinthiscase(tolevelC).€/day$/€ABCD€S€S€*D€*8ExchangerateadjustmentThemoresignificantdepreciationofthedollar(fromAtoC)willhavemoresevereinflationaryeffectsontheU.S.economy.Thisimplicationpointstotheimportanceofknowingtheelasticityofthesupplyanddemandcurves.€/day$/€ACD€S€*S€D€*9ElasticitySincethedemandforforeigncurrencydependsonthedemandforimports,theelasticitydependsonthepriceelasticityofthedemandforimports(ηM).ηM=%ΔQM÷%ΔPM
Similarly,theelasticityofsupplydependsonthepriceelasticityofsupplyforexports(ηX).ηX=%ΔQX÷%ΔPX10UnstableforeignexchangemarketIfthesupplyofforeigncurrencyisnegativelyslopedandmoreelasticthanthedemandforforeigncurrency,theforeignexchangemarketwillbeunstable.€/day$/€S€D€11UnstableforeignexchangemarketIfthesupplyofforeigncurrencyisnegativelyslopedandmoreelasticthanthedemandforforeigncurrency,theforeignexchangemarketwillbeunstable.Inthiscase,atradedeficitoccursatanexchangerateabovetheequilibriumvalue.A€/day$/€S€D€12UnstableforeignexchangemarketAtlevelA,thequantitydemandedofforeignexchange(Z)exceedsthequantitysupplied(Y).AYZ€/day$/€S€D€13UnstableforeignexchangemarketAtlevelA,thequantitydemandedofforeignexchange(Z)exceedsthequantitysupplied(Y).Theexcessdemandputsupwardpressureontheexchangerateandpushestheexchangemarketfurtherfromequilibrium.AYZ€/day$/€S€D€14TheMarshall-LernerconditionTheunstableconditionjustdepictedwillbeavoidediftheMarshall-Lernerconditionholds.TheMarshall-LernerconditionisthatηM+ηX
>1.Empiricalevidenceindicatesthatthisconditiondoeshold.15J-curveeffectAcurrencydepreciationisexpectedtolessenacountry’stradedeficit.Thisimprovementmaytaketimetooccur.Initially,thedepreciationmayworsenthetradedeficitsinceimportpriceswillrisemorequicklythantheimprovementinexports.ThisgeneratesaJ-shapedpatterntoexchangeratemovements.16ThegoldstandardThegoldstandardgeneratesasystemoffixedexchangerates.17ThegoldstandardThegoldstandardgeneratesasystemoffixedexchangerates.Thegoldstandardfortheinternationalmonetarysystemoperatedfrom1880to1914.Thissystemissimilartothepost-WWIIBrettonWoodsmonetarysystemthatcollapsedin1971.18ThegoldstandardThegoldstandardgeneratesasystemoffixedexchangerates.Thegoldstandardfortheinternationalmonetarysystemoperatedfrom1880to1914.Underthegoldstandard,eachnationspecifiedthegoldcontentofitscurrency.£1goldcoincontained113.0016grainsofgold$1goldcoincontained23.22grainsofgoldThisentailsanexchangerateof113.0016÷23.22or$4.87/£.19ThegoldstandardThegoldstandardgeneratesasystemoffixedexchangerates.Thegoldstandardfortheinternationalmonetarysystemoperatedfrom1880to1914.Underthegoldstandard,eachnationspecifiedthegoldcontentofitscurrency.Theexchangerateof$4.87/£isknownasmintparity.20ThegoldstandardAsthecostofshippinggoldfromNewYorktoLondonwasapproximately3cents,theactualexchangeratewouldalwaysliebetween$4.84/£and$4.90/£.$4.84/£isthegoldimportpoint.$4.90/£isthegoldexportpoint.21AdjustmentunderthegoldstandardAdjustmenttoequilibriumunderthegoldstandardoccursviatheprice-specie-flowmechanism.Theconceptoftheprice-specie-flowmechanismwasinitiallyintroducedin1752byDavidHume.22AdjustmentunderthegoldstandardAdjustmenttoequilibriumunderthegoldstandardoccursviatheprice-specie-flowmechanism.Ifatradeimbalanceexists,goldwillflowfromthecountrywithatradedeficittothecountrywithatradesurplus.23AdjustmentunderthegoldstandardAdjustmenttoequilibriumunderthegoldstandardoccursviatheprice-specie-flowmechanism.Ifatradeimbalanceexists,goldwillflowfromthecountrywithatradedeficittothecountrywithatradesurplus.Thefallingoldsuppliesinthetradedeficitcountryreducesitsmoneysupplyandpushesitspricelevellower;theincreaseingoldsuppliesinthetradesurpluscountryincreasesitsmoneysupplyandraisesitspricelevel.24AdjustmentunderthegoldstandardThepricelevelmovementisseenviatheequationofexchange:M•V=P•Y(whereMisthemoneysupply,Visthevelocityofmoney,Pisthepricelevel,andYisrealoutput).Asthepricelevelfallsinthecountrywithatradedeficit,exportsofitsgoodsandserviceswillbeencouraged;asthepricelevelincreasesinthecountrywithatradesurplus,exportsofitsgoodsandserviceswillbediscouraged.25AdjustmentunderthegoldstandardThesechangesintradewilldecreaseboththetradedeficitandsurplusleavingasituationofbalancedinternationaltrade.26IncomedeterminationinaclosedeconomyInaclosedeconomy(withoutinternationaltrade)withoutagovernmentsector,equilibriumoutputisdeterminedby:Y=C+S=C+I whereYisincome,Cisplannedconsumptionexpenditures,Iisplannedbusinesssavings,andSissavings.27IncomedeterminationinaclosedeconomyInaclosedeconomy(withoutinternationaltrade)withoutagovernmentsector,equilibriumoutputisdeterminedby:Y=C+S=C+I whereYisincome,Cisplannedconsumptionexpenditures,Iisplannedbusinesssavings,andSissavings.Thisyieldsanequilibriumconditionof:S–I=0.28IncomedeterminationinaclosedeconomyThisyieldsanequilibriumconditionof:S–I=0.Inwords,thisentailsthatatequilibriumleakagesfromtheeconomy(S)mustbebalancedbyinjectionsintotheeconomy(I).29IncomedeterminationinaclosedeconomyInwords,thisentailsthatatequilibriumleakagesfromtheeconomy(S)mustbebalancedbyinjectionsintotheeconomy(I).Ifplannedinvestmentisautonomousbutsavingsisdeterminedbythemarginalpropensitytosave(s),then:ΔS=sΔY.Themarginalpropensitytosave(s)isamountofadditionalsavingsthatflowsfromeachadditionaldollarofincome.30IncomedeterminationinaclosedeconomyIfplannedinvestmentisautonomousbutsavingsisdeterminedbythemarginalpropensitytosave(s),then:ΔS=sΔY.SinceS=Iatequilibrium,thisentailsthat:ΔI=sΔYor1÷s=ΔY÷ΔI.31IncomedeterminationinaclosedeconomySinceS=Iatequilibrium,thisentailsthat:ΔI=sΔYor1÷s=ΔY÷ΔI.Ifk=1÷s,thenΔY=k•ΔI.kisthemultiplier.Anychangeininvestmentwillinduceamultipliedchangeinincomeasgivenbytheaboveformula.32IncomedeterminationinaclosedeconomyIfk=1÷s,thenΔY=k•ΔI.Anexamples=0.25ΔI=300Whatisthevalueofk?k=1÷0.25=4Whatisthechangeinincome?ΔY=4•300=1,20033IncomedeterminationinanopeneconomyInanopeneconomy,equilibriumisstilldeterminedbytheconditionthatleakagesmustequalinjections.Inanopeneconomy,imports(M)areanewleakage.Inanopeneconomy,exports(X)areanewinjection.34IncomedeterminationinanopeneconomyInanopeneconomy,equilibriumisstilldeterminedbytheconditionthatleakagesmustequalinjections.Thenewequilibriumequationis:S+M=I+XorΔS+ΔM=ΔI+ΔX.35IncomedeterminationinanopeneconomyThenewequilibriumequationis:S+M=I+XorΔS+ΔM=ΔI+ΔX.IfΔM=mΔY,thenthemultiplier(k*)becomes:k*=1÷(s+m)Wheremisthemarginalpropensitytoimport.36IncomedeterminationinanopeneconomyThenewequilibriumequationis:S+M=I+XorΔS+ΔM=ΔI+ΔX.IfΔM=mΔY,thenthemultiplier(k*)becomes:k*=1÷(s+m)Wheremisthemarginalpropensitytoimport.ThisleavesΔY=k*•ΔIorΔY=k*•ΔX.37IncomedeterminationinanopeneconomyThisleavesΔY=k*•ΔIorΔY=k*•ΔX.
Anexamples=0.25m=0.25ΔI=400Whatisthevalueofk*?k=1÷(0.25+0.25)=2Whatisthechangeinincome?ΔY=2•200=80038ForeignrepercussionsSupposeNation1experiencesanincreaseinitsplannedautonomousinvestment.TheincreaseinNation1’sincomewillincreaseitsimportsbymΔY.Assumingonlytwocountries,Nation1’sincreasedimportswillincreaseNation2’sexportsleadingtoanexpansioninNation2’sincomebyk2*•ΔX2.TheincreaseinNation2’sincomewillleadtoanincreaseinitsimports,spurringasecondaryexpansioninNation1.39AbsorptionapproachTheabsorptionapproachintegratestheeffectofinducedincomechangesintheprocessofcorrectingabalanceofpaymentsdisequilibriumbyachangeintheexchangerate.40AbsorptionapproachTheabsorptionapproachintegratestheeffectofinducedincomechangesintheprocessofcorrectingabalanceofpaymentsdisequilibriumbyachangeintheexchangerate.Domesticequilibriumisgivenby:Y=C+I+(X–M).41AbsorptionapproachDefineA(domesticabsorption)=C+IandB(foreignabsorption)=X–M.Then:Y=A+BorY–A=B.AdepreciationofthecurrencyisexpectedtoincreaseB.42AbsorptionapproachAdepreciationofthecurrencyisexpectedtoincreaseB.ThiscanonlyoccurifAfallsorYincreases.Iftheeconomyisatfullemployment,Ycannotincrease.Therefore,adepreciationmustresultinafallinA.43AbsorptionapproachThiscanonlyoccurifAfallsorYincreases.Forcesthatleadtoafallindomesticabsorption(A).Incomeisredistributedfromwagestoprofits.T
温馨提示
- 1. 本站所有资源如无特殊说明,都需要本地电脑安装OFFICE2007和PDF阅读器。图纸软件为CAD,CAXA,PROE,UG,SolidWorks等.压缩文件请下载最新的WinRAR软件解压。
- 2. 本站的文档不包含任何第三方提供的附件图纸等,如果需要附件,请联系上传者。文件的所有权益归上传用户所有。
- 3. 本站RAR压缩包中若带图纸,网页内容里面会有图纸预览,若没有图纸预览就没有图纸。
- 4. 未经权益所有人同意不得将文件中的内容挪作商业或盈利用途。
- 5. 人人文库网仅提供信息存储空间,仅对用户上传内容的表现方式做保护处理,对用户上传分享的文档内容本身不做任何修改或编辑,并不能对任何下载内容负责。
- 6. 下载文件中如有侵权或不适当内容,请与我们联系,我们立即纠正。
- 7. 本站不保证下载资源的准确性、安全性和完整性, 同时也不承担用户因使用这些下载资源对自己和他人造成任何形式的伤害或损失。
最新文档
- 皮革制品招投标现状解析
- 护理硕士毕业论文答辩
- 建筑维修审查合同
- 高中生物遗传病概率计算
- 植物园绿化项目聘用合同
- 运动俱乐部泳池租赁协议
- 电子科技清罐施工合同
- 石油公司电气安全检查流程
- 地铁站装修改造协议
- 矿井排水泵机租赁协议
- 教学病例讨论模板
- 林业工程竣工报告
- 从偏差行为到卓越一生3.0版
- 失血性休克患者的麻醉处理
- 2024网站渗透测试报告
- DG-TJ08-2433A-2023 外墙保温一体化系统应用技术标准(预制混凝土反打保温外墙)
- 九年级上期中考试质量分析
- 《共情的力量》课件
- 单词默写表(素材)-2023-2024学年人教PEP版英语五年级上册
- 屠宰行业PEST分析
- JBT 14191-2023 管道带压开孔机 (正式版)
评论
0/150
提交评论