CHAPTER 9Balance-of-Payments and Exchange Rate Determination课件.pptVIP

CHAPTER 9Balance-of-Payments and Exchange Rate Determination;Modern Asset Viewassumes perfect capital mobility, i.e., CIP holds;The Monetary Base (MB)– Ms;1;Simplified Central Bank Balance Sheet: Ms;2;Money Stock (M): Ms;3;Money Multiplier (m=1/rr):Ms;4;Relating the Monetary Base (MB) and the Money Stock (M): Ms;5;Example - BOJ Intervention: Ms;6;Simplified Balance Sheets of the Fed and the BOJMs;7;The Effect of a Foreign Exchange Purchase on the BOJ’s Balance Sheet: Ms;8;BOJ Intervention: Ms;9;Sterilization by Japan: Ms;10;The Combined Effects of a Foreign Exchange Transaction Sterilization: Ms;11 ;The Monetary Approach to BOP Determination (MOP): Ms;12;Small Country Example (recall: firm as a price-taker in Econ 1B): Ms and Md;13;Small Country Model: Fixed Exchange Rate Regime;Small Country Model;Small Country Example :Flexible Exchange Rate Regime;Long-run exchange rate based on absolute PPP;Effect of an increase in home money supply on LR SH/F;Effect of an increase in foreign money supply on LR SH/F;Effect of an increase in home interest rate on LR SH/F;Effect of an increase in foreign interest rate on LR SH/F;Effect of an increase in home output on LR SH/F;Effect of an increase in foreign output on LR SH/F;Long-run exchange rate based on absolute PPP;How is long-run exchange rate (LR S) determined?;The Portfolio Approach,1;The Portfolio Approach,2;The Portfolio Approach, 3;The Portfolio Approach, 4;The Portfolio Balance;The Portfolio Approach;Case I diagram: A Decrease in the Domestic Interest Rate (RH);Case II: Increase in Home Wealth (WH) [think Japan] because of a CA0;Effect of an increase in home interest rate on LR SH/F;A Change in the Foreign Interest Rate(let H=South Africa, F=USA);A Change in the Foreign Interest Rate