Interational Finance.ppt

International Finance 主讲教师：王歆 wangxin08@lcu.edu.cn Preface WHY WHAT HOW Main content Trade balance Foreign exchange rate Balance of payment HOW Preview the textbook Read reference literature Chapter 1 balance of payments National income account under an open economy Balance-of-payment account in an open economy Balance and imbalance of BP Section 1 national income account  under an open economy Accounting of national economy National income under an open economy Macro meaning of current account Accounting of national economy(1) Y--------national income C--------private consumption I---------private investment G--------government purchases ---------private savings --------government savings Accounting of national economy(2) Closed economy aggregate demand: Y=C+I+G aggregate supply: Accounting of national economy(3) Open economy aggregate demand: Y=C+I+G+(X-M) aggregate supply: Accounting of national economy(4) Difference between above identities In open economy, it broadens the source and channels of savings and investment In open economy, a country can utilize both domestic and foreign resources to develop its economy National incomes under an open economy(1) Statistical indicators National incomes in an open economy(2) suppose: home national home territory foreign national foreign territory home national foreign territory foreign national home territory National incomes in an open economy(3) CA（current account）：经常账户 CA0，surplus；CA0，deficit Macro meaning of current account(1) International trade CA=X-M (NFP=0) Domestic absorption Y=C+I+G+CA Macro meaning of current account(2) International investment position (IIP,国际投资头寸） Net international investment position （NIIP，净国际投资头寸） Macro meaning of current account(3) Investment and saving SI,CA0，net export，foreign asset SI,CA0，net import，foreign liability Macro meaning of current account(4) Fiscal policy expansionary