中文曼昆宏观经济学第七版讲义.ppt

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1、MACROECONOMICS 2011 Worth Publishers,all rights reserved 2011 Worth Publishers,all rights reservedS E V E N T H E D I T I O NPowerPoint Slides by Ron CronovichN.Gregory MankiwC H A P T E RThe Open Economy52 0 1 0 U P D A T EIn this chapter,you will learn:accounting identities for the open economythe

2、 small open economy modelwhat makes it“small”how the trade balance and exchange rate are determinedhow policies affect trade balance&exchange rateImports and exports(%of GDP),20083CHAPTER 5 The Open EconomyIn an open economy,spending need not equal outputsaving need not equal investment4CHAPTER 5 Th

3、e Open EconomyPreliminariesEX=exports=foreign spending on domestic goodsIM=imports=C f+I f+G f=spending on foreign goodsNX=net exports(a.k.a.the“trade balance”)=EX IMsuperscripts:d=spending on domestic goodsf=spending on foreign goods5CHAPTER 5 The Open EconomyGDP=expenditure on domestically produce

4、d g&s6CHAPTER 5 The Open EconomyThe national income identity in an open economyY=C+I+G+NXor,NX =Y (C +I +G)net exportsdomestic spendingoutput7CHAPTER 5 The Open EconomyTrade surpluses and deficitstrade surplus:output spending and exports imports Size of the trade surplus=NXtrade deficit:spending out

5、put and imports exports Size of the trade deficit=NXNX =EX IM =Y (C +I +G)8CHAPTER 5 The Open EconomyInternational capital flowsNet capital outflow=S I=net outflow of“loanable funds”=net purchases of foreign assets the countrys purchases of foreign assets minus foreign purchases of domestic assetsWh

6、en S I,country is a net lenderWhen S I,country is a net borrower9CHAPTER 5 The Open EconomyThe link between trade&cap.flowsNX =Y (C +I +G)implies NX =(Y C G)I =S Itrade balance=net capital outflowThus,a country with a trade deficit(NX 0)is a net borrower(S 0,S =0,net capital outflow and NX fall by t

7、he amount I NX2NX1I 1I 2SI(r)224CHAPTER 5 The Open EconomyThe nominal exchange ratee =nominal exchange rate,the relative price of domestic currency in terms of foreign currency(e.g.Yen per Dollar)A few exchange rates,as of 11/01/2010countryexchange rateEuro area0.72 Euro/$Indonesia8,930 Rupiahs/$Jap

8、an80.6 Yen/$Mexico12.4 Pesos/$Russia30.8 Rubles/$South Africa7.0 Rand/$U.K.0.62 Pounds/$26CHAPTER 5 The Open EconomyThe real exchange rate =real exchange rate,the relative price of domestic goods in terms of foreign goods(e.g.Japanese Big Macs per U.S.Big Mac)the lowercase Greek letter epsilon27CHAP

9、TER 5 The Open EconomyUnderstanding the units of 28CHAPTER 5 The Open Economyone good:Big Macprice in Japan:P*=200 Yenprice in USA:P =$2.50nominal exchange rate e=120 Yen/$To buy a U.S.Big Mac,someone from Japan would have to pay an amount that could buy 1.5 Japanese Big Macs.McZample 29CHAPTER 5 Th

10、e Open Economy in the real world&our modelIn the real world:We can think of as the relative price of a basket of domestic goods in terms of a basket of foreign goodsIn our macro model:Theres just one good,“output.”So is the relative price of one countrys output in terms of the other countrys output3

11、0CHAPTER 5 The Open EconomyHow NX depends on U.S.goods become more expensive relative to foreign goods EX,IM NXU.S.net exports and the real exchange rate,1973-2009NX(%of GDP)Index(March 1973=100)020406080100120140-8%-6%-4%-2%0%2%4%197019751980198519901995200020052010Net exports(left scale)Trade-weig

12、hted real exchange rate index32CHAPTER 5 The Open EconomyThe net exports functionThe net exports function reflects this inverse relationship between NX and :NX =NX()33CHAPTER 5 The Open EconomyThe NX curve for the U.S.0NXNX()1When is relatively low,U.S.goods are relatively inexpensiveNX(1)so U.S.net

13、 exports will be high34CHAPTER 5 The Open EconomyThe NX curve for the U.S.0NXNX()2At high enough values of,U.S.goods become so expensive that NX(2)we export less than we import35CHAPTER 5 The Open EconomyHow is determinedThe accounting identity says NX=S IWe saw earlier how S I is determined:S depen

14、ds on domestic factors(output,fiscal policy variables,etc)I is determined by the world interest rate r*So,must adjust to ensure36CHAPTER 5 The Open EconomyHow is determinedNeither S nor I depend on,so the net capital outflow curve is vertical.NXNX()adjusts to equate NX with net capital outflow,S-I.1

15、NX 137CHAPTER 5 The Open EconomyInterpretation:supply and demand in the foreign exchange marketdemand:Foreigners need dollars to buy U.S.net exports.NXNX()supply:Net capital outflow(S-I)is the supply of dollars to be invested abroad.1NX 138CHAPTER 5 The Open EconomyNext,four experiments:1.Fiscal pol

16、icy at home2.Fiscal policy abroad3.An increase in investment demand(exercise)4.Trade policy to restrict imports39CHAPTER 5 The Open Economy1.Fiscal policy at homeA fiscal expansion reduces national saving,net capital outflow,and the supply of dollars in the foreign exchange market causing the real e

17、xchange rate to rise and NX to fall.NXNX()1NX 1NX 2 240CHAPTER 5 The Open Economy2.Fiscal policy abroadAn increase in r*reduces investment,increasing net capital outflow and the supply of dollars in the foreign exchange market causing the real exchange rate to fall and NX to rise.NXNX()NX 1 1 2NX 2N

18、OW YOU TRY:3.Increase in investment demandNX()1NX 1NXDetermine the impact of an increase in investment demand on net exports,net capital outflow,and the real exchange rateANSWERS:3.Increase in investment demandAn increase in investment reduces net capital outflow and the supply of dollars in the for

19、eign exchange market NX()1NX 1NX 2 2NXcausing the real exchange rate to rise and NX to fall.43CHAPTER 5 The Open Economy4.Trade policy to restrict importsNXNX()1NX1 1NX()2At any given value of,an import quota IM NX demand for dollars shifts rightTrade policy doesnt affect S or I,so capital flows and

20、 the supply of dollars remain fixed.244CHAPTER 5 The Open Economy4.Trade policy to restrict importsNXNX()1NX1 1NX()2Results:0(demand increase)NX =0(supply fixed)IM 0(policy)EX 0(rise in )245CHAPTER 5 The Open EconomyThe determinants of the nominal exchange rateStart with the expression for the real

21、exchange rate:Solve for the nominal exchange rate:46CHAPTER 5 The Open EconomyThe determinants of the nominal exchange rateSo e depends on the real exchange rate and the price levels at home and abroadand we know how each of them is determined:47CHAPTER 5 The Open EconomyThe determinants of the nomi

22、nal exchange rateRewrite this equation in growth rates(see“arithmetic tricks for working with percentage changes,”Chap 2):For a given value of,the growth rate of e equals the difference between foreign and domestic inflation rates.Inflation differentials and nominal exchange rates for a cross sectio

23、n of countries%change in nominal exchange rateinflation differentialIcelandMexicoU.K.S.KoreaJapanSingaporeCanadaAustraliaS.AfricaPakistan49CHAPTER 5 The Open EconomyPurchasing Power Parity(PPP)Two definitions:A doctrine that states that goods must sell at the same(currency-adjusted)price in all coun

24、tries.The nominal exchange rate adjusts to equalize the cost of a basket of goods across countries.Reasoning:arbitrage,the law of one price50CHAPTER 5 The Open EconomyPurchasing Power Parity(PPP)PPP:e P =P*Cost of a basket of domestic goods,in foreign currency.Cost of a basket of domestic goods,in d

25、omestic currency.Cost of a basket of foreign goods,in foreign currency.Solve for e:e =P*/P PPP implies that the nominal exchange rate between two countries equals the ratio of the countries price levels.51CHAPTER 5 The Open EconomyPurchasing Power Parity(PPP)If e=P*/P,then and the NX curve is horizo

26、ntal:NXNX =1S -IUnder PPP,changes in(S I)have no impact on or e.52CHAPTER 5 The Open EconomyDoes PPP hold in the real world?No,for two reasons:1.International arbitrage not possible.nontraded goodstransportation costs2.Different countries goods not perfect substitutes.Yet,PPP is a useful theory:Its

27、simple&intuitive.In the real world,nominal exchange rates tend toward their PPP values over the long run.no changeno change no changeno change 129.4-2.019.46.317.43.9115.1-0.319.91.119.62.2closed economysmall open economyactual changeNXIrSG T1980s1970sData:decade averages;all except r and are expres

28、sed as a percent of GDP;is a trade-weighted index.CASE STUDY:The Reagan deficits revisited54CHAPTER 5 The Open EconomyThe U.S.as a large open economySo far,weve learned long-run models for two extreme cases:closed economy(chap.3)small open economy(chap.5)A large open economy like the U.S.fallsbetwee

29、n these two extremes.The results from large open economy analysis are a mixture of the results for the closed&small open economy cases.For example 55CHAPTER 5 The Open EconomyNXIrlarge open economysmall open economyclosed economyA fiscal expansion in three modelsfalls,but not as much as in small ope

30、n economyfallsno changefalls,but not as much as in closed economynochangefallsrises,but not as much as in closed economynochangerisesA fiscal expansion causes national saving to fall.The effects of this depend on openness&size:Chapter SummaryNet exports-the difference between exports and importsa co

31、untrys output(Y)and its spending(C+I+G)Net capital outflow equalspurchases of foreign assets minus foreign purchases of the countrys assetsthe difference between saving and investmentChapter SummaryNational income accounts identities:Y =C +I +G +NXtrade balance NX =S -I net capital outflowImpact of

32、policies on NX:NX increases if policy causes S to rise or I to fallNX does not change if policy affects neither S nor I.Example:trade policyChapter SummaryExchange ratesnominal:the price of a countrys currency in terms of another countrys currencyreal:the price of a countrys goods in terms of anothe

33、r countrys goodsThe real exchange rate equals the nominal rate times the ratio of prices of the two countries.Chapter SummaryHow the real exchange rate is determinedNX depends negatively on the real exchange rate,other things equalThe real exchange rate adjusts to equate NX with net capital outflowC

34、hapter SummaryHow the nominal exchange rate is determinede equals the real exchange rate times the countrys price level relative to the foreign price level.For a given value of the real exchange rate,the percentage change in the nominal exchange rate equals the difference between the foreign&domestic inflation rates.