国际金融第十二章节.pptVIP

Daniels and VanHoose Econoic Policy Economic Policy with Floating Exchange Rates Main Topics in the Chapter: How do monetary and fiscal policy actions affect a nation’s real income under floating exchange rate? How does perfect capital mobility influence the relative effectiveness of monetary and fiscal policy actions in a small open country that permits its exchange rates to float? In a two-country setting with a floating exchange rate, to what extent can policy actions in one nation influence economic activity in the other nation? What is the basic economic efficiency trade-off faced in choosing between fixed and floating exchange rates? How does the choice between fixed and floating exchange rates depend in part on its implications for economic stability and monetary policy autonomy? What is the effect of monetary and fiscal policy on a nation under floating exchange rate. What are the advantages and disadvantages of a floating exchange rate for a nation? Ⅰ.Floating Exchange Rates and Imperfect Capital Mobility If choosing fixed ex. Rate, (1)central bank has to intervene the foreign market with exchange reserves, and (2)it has to decide to sterilize the intervention. By permitting the ex. Rate to float, central bank relieves itself from these burdens. But it will increase the potential for monetary policy actions. And the fiscal policy will lose some its potency. The Effect of Exchange-Rate Variations in the IS-LM-BP Exchange-Rate Variation and its Effect on the IS Schedule When domestic currency depreciates, the import will contract, and the export expend. This generate a rise in the nation’s autonomous expenditures at any given nominal interest rate. Thus, real income y will increase. Exchange-Rate Variations and its Effect on the BP Schedule The nation’s currency depreciates, the export will increase. It will generate an improvement in the trade balance that results in a balance-of-payments surplus at point A. This means that for the balance of pay