ExangeRateDetermination(国际经济学(ByRobertJCarbaugh)优秀讲义.ppt

Carbaugh, Chap. 13 International EconomicsBy Robert J. Carbaugh9th Edition Chapter 13: Exchange-Rate Determination Factors influencing exchange rates Market fundamentals Bilateral trade balances Real income Real interest rates Inflation rates Consumer preferences for domestic or foreign products Productivity changes affecting production costs Profitability and riskiness of investments Factors influencing exchange rates Market fundamentals (cont’d) Product availability Monetary policy and fiscal policy Government trade policy Market expectations News about future market fundamentals Speculative opinion about future exchange rates When are these factors important? Short run (days) Dominated by financial transfers responding to: Differences in real interest rates Shifting expectations of future exchange rates Medium run (months) Primarily influenced by economic cycles When are these factors important? Long run (years) Dominated by movements of goods, services, investment, which are influenced by: Inflation rates Investment profitability Consumer tastes Real income Productivity Trade policy How these factors interact to affect exchange rates depends on the relative importance of trade and financial relations between the countries Exchange rate components Real income differentials A country with faster economic growth than the rest of the world will have a depreciating currency (other things being equal) Imports rise faster than exports, so demand for foreign currency rises faster than its supply Real income changes can also reflect other processes, which might lead to rising exports Impact of real income differentials Real interest rates Short term real interest rate differences influence international capital movements Real interest rate is nominal minus inflation Low short term rates lead to less demand for the currency and depreciation High rates lead to greater demand for the currency and appreciation Impact of interest rate differentials Purchasing power parity L