国际金融学theoryofbalanceofpayments教学教程.ppt

I.3 Purchasing Power Parity P=SP* Where, P* denotes foreign price and S, the exchange rate as aforementioned. I.4 Money Market Equilibrium kSP*Y=R+D [*] I.5 Simple Illustrations From equation [*], we can easily obtain, kP*Y?S+kSY?P*+kSP*?Y=?R+?D ?S/S+?P*/P*+?Y/Y=(?R+?D)/M [**] Monetary Approach Monetary Approach Case 1: Fixed exchange rate regime When S keeps constant, [**] can be simplified as, ?R/M=?P*/P*+?Y/Y-?D/M This means that, in a fixed rate regime, if price and income being unchanging, domestic credit changes will lead to the changes of international reserves and