宏观经济学讲义(CCER )英文.ppt

* Effects of Policies on Real Ex-rate Home fiscal policy expansionary S ↓? S – I ↓ Domestic currency invested abroad ↓ Domestic currency appreciates Nominal ex-rate ↑ Real ex-rate ↑ if prices do not change Domestic goods become more expensive Exports ↓ imports ↑ NX ↓ * Effects of Policies on Real Ex-rate NX ε S-I NX ε * Effects of Policies on Real Ex-rate Fiscal policy abroad expansionary Foreign S ↓ foreign S-I ↓ r*↑? I ↓? S-I ↑ Supply of domestic currency ↑ Nominal ex-rate ↓ Real ex-rate ↓ if prices keep the same Domestic goods become cheaper Exports ↑ imports ↓ NX↑ * Effects of Policies on Real Ex-rate NX ε S-I NX ε * Effects of Policies on Real Ex-rate Change in investment demand I,S I r* S r r* S I I’ NX NX S-I * Effects of Policies on Real Ex-rate I↓ ? S-I ↑ ? supply of domestic currency ↑ ? domestic currency depreciates ? nominal ex-rate ↓ ? real ex-rate ↓ ? domestic goods cheaper ? EX ↑ IM ↓ ? NX ↑ * Effects of Trade Policies Trade policies Tariff: placing a tax on foreign imports Quota: restricting the amount of imports * Effects of Trade Policies Consider an extreme case: prohibit imports Imports ↓ NX ↑ at the original ex-rate supply for domestic currency ↓ domestic currency appreciates ex-rates ↑ * Effects of Trade Policies Prohibited trade policy NX NX S-I NX1 NX2 * Determinants of Nominal Ex-rate From real ex-rate Nominal ex-rate depends on the real ex-rate and the p levels in the 2 countries * Determinants of Nominal Ex-rate We cannot see real ex-rate The law of one price Purchasing-power parity w/ arbitrage * Determinants of Nominal Ex-rate e.g. The Beatle is $20,000 in the U.S. and RMB ￥470,000 in China. What is the nominal ex-rate? How would arbitrageurs act * Determinants of Nominal Ex-rate PPP ? real ex-rate 1 NX S-I NX 1 * Determinants of Nominal Ex-rate Real ex-rate 1 Change in S-I only affects NX and nominal ex-rate, not real ex-rate Any change in the relative price levels of the 2 countries