商品与劳务.ppt

The global capital market: Performance policy problems International capital market Definition: the market in which residents of different countries trade assets. market participants and facilities are the same as the foreign exchange market. Three points to be discussed how has the global financial network enhanced countries’ gains from trade? what caused the rapid growth in international financial activity? how can policy makers minimize problems raised by a worldwide capital market without reducing the benefits it provides? Portfolio diversification as a motive for international asset trade International trade in assets can make both parties to the trade better off by allowing them to reduce the riskiness of the return on their wealth. →portfolio diversification Don’t put all your eggs in one baskets. 风水轮流转 A major function of the international capital market is to make asset portfolios diversification possible! International assets: Debt vs. Equity Debt instruments: Bond and banks deposits since they specify that the issuer of the instrument must repay a fixed value (the sum of principal plus interest) regardless of economic circumstances. Equity instruments: a share of stock, it is a claim to a firm’s profits, rather than a fixed payment, and its payoff will vary according to circumstance. Structure of the international capital market Commercial banks Corporations Nonbank financial institutions Central banks and other government agencies Growth of the international capital market The scale of transactions in the international capital market has grown more quickly than world GDP since the early 1970s. An important reason for that development is related to exchange rate systems. A country that fixes its currency’s exchange rate while allowing international capital movements gives up control over domestic monetary policy. Trilemma for policy regimes Fixed exchange rate Monetary policy oriented toward domestic goals Freedom of international capital movements T