布兰查德-宏观经济学-第四版-第20章.pptVIP

Output, the Interest Rate,and the Exchange Rate The model developed in this chapter is an extension of the open economy IS-LM model, known as the Mundell-Fleming model. The main questions we try to solve are: What determines the exchange rate? How can policy makers affect exchange rates? Equilibrium in the Goods Market Equilibrium in the goods market can be described by the following equations: Equilibrium in the Goods Market Consumption C depends positively on disposable income Y-T. Investment I depends positively on output Y, and negatively on the real interest rate r. Government spending G is taken as given. The quantity of imports IM depends positively on both output Y and the real exchange rate . Exports X depend positively on foreign output Y* and negatively on the real exchange rate . Equilibrium in the Goods Market The main implication of this equation is that both the real interest rate and the real exchange rate affect demand and, in turn, equilibrium output: An increase in the real interest rate leads to a decrease in investment spending, and to a decrease in the demand for domestic goods. An increase in the real exchange rate leads to a shift in demand toward foreign goods, and to a decrease in net exports. Equilibrium in the Goods Market In this chapter we make two simplifications: Both the domestic and the foreign price levels are given; thus, the nominal and the real exchange rate move together: Equilibrium in Financial markets Now that we look at a financially open economy, we must also take into account the fact that people have a choice between domestic bonds and foreign bonds. Money Versus Bonds We wrote the condition that the supply of money be equal to the demand for money as: We can use this equation to think about the determination of the nominal interest rate in an open economy. Domestic Bonds Versus Foreign Bonds What combination of domestic and foreign bonds should financial investors choose in order to maximize expec