[经济学]ch12 Output and the Exchange Rate in the Short Run.pptVIP

Chapter 12 Output and the Exchange Rate in the Short Run ……………………………………………… Germany, the world’s second largest exporter after China, is on track for 16 per cent growth in foreign trade this year, mostly spurred by buoyant demand from emerging markets. But there are signs that export growth is slipping. Several industrialists told the Financial Times they were worried export growth could be hit further by the falling dollar and the prospect of more quantitative easing in the US. ……………………………………………….. Anton B?rner, president of the German exporters’ association, said he was afraid of a vicious spiral: “We expect the US to continue its policy of printing money. This will trigger a currency devaluation spiral that will hit Europe the most.”……………….. Source: Financial Times Oct. 21, 2010 Why are German exporters expressing growing anxiety about the appreciation of the euro against the US dollar and the prospect of a currency war? “I am very worried that there could be a devaluation race, which would inevitably bring higher inflation. This would trigger higher interest rates and hit global economic growth,” A senior executive of Volkswagen said. -----Why and How to affect on economic growth? Introduction The goal for a economy is to keep output level of full employment. Macroeconomic changes that affect exchange rates, interest rates, and price levels may also affect output. Function of policies: The effects of macroeconomic policy tools to maintain full employment Main idea By putting a short-run model of the output market together with the models of the asset markets, we build a model that explains the short-run behavior of all the important macroeconomic variables in an open economy. To examine relationship between exchange rate and output in both output market and asset market. To discuss how fiscal and monetary policies impact outp