ShortRun(国际金融香港大学,WONGKaFu).pptxVIP

Output and Exchange Rate in the Short Run;Aggregate demand for domestic goods;Consumption of domestic goods;Consumption by home citizens;Current account;?CA/?qH/F 0 (CA measured in domestic output);?CA/?Yd 0;Aggregate Demand for domestic goods;1 ?D/?Y 0;1 ?D/?Y 0;Determination of output in the short run;Effect of an increase in E on short-run output equilibrium;Output, Y;Output, Y;Output, Y;The following changes have similar effect on DD schedule;Rate of return (in home currency);Rate of return (in home currency);;;Rate of return (in home currency);Factors that shift the AA schedule;Output, Y;Output, Y;Temporary changes in monetary and fiscal policy;A permanent increase in money supply;A temporary increase in money supply;Output, Y;A temporary Fiscal expansion (increase in government expenditure);Output, Y;A temporary under full employment caused by a temporary fall in world demand;A temporary fall in world demand;Output, Y;Two ways to restore full employment;Output, Y;Output, Y;Different effects in the use of fiscal and monetary tools to restore full employment;A temporary under full employment caused by a temporary increase in money demand;A temporary increase in money demand;Output, Y;Two ways to restore full employment;Output, Y;Output, Y;Permanent shifts in monetary and fiscal policy;A permanent increase in money supply;A permanent increase in money supply;Rate of return (in home currency);Output, Y;Change in price level after a permanent increase in money supply;Output, Y;Overshooting revisited;A permanent fiscal expansion;Output, Y;Output, Y;Output, Y;A permanent fiscal expansion implies an increase in world relative demand for home products;Rate of return (in home currency);Rate of return (in home currency);;Rate of return (in home currency);Output, Y;Claim:;Output, Y;Why must the shift in AA offset the shift in DD in the short run?;A possibility: A permanent fiscal expansion implies an increase in world relative demand for home products;Assumption