CH14Money-Interest-Rates-and-Exchange-rates(国际经济学-Iordanis-Petsas).ppt

Chapter14 Money InterestRates andExchangerates Slide14 2 Copyright 2003PearsonEducation Inc IntroductionMoneyDefined ABriefReviewTheDemandforMoneybyIndividualsAggregateMoneyDemandTheEquilibriumInterestRate TheInteractionofMoneySupplyandDemand ChapterOrganization Slide14 3 Copyright 2003PearsonEducation Inc TheMoneySupplyandtheExchangeRateintheShortRunMoney thePriceLevel andtheExchangeRateintheLongRunInflationandExchangeRateDynamicsSummary ChapterOrganization Slide14 4 Copyright 2003PearsonEducation Inc Introduction Factorsthataffectacountry smoneysupplyordemandareamongthemostpowerfuldeterminantsofitscurrency sexchangerateagainstforeigncurrencies Thischaptercombinestheforeign exchangemarketwiththemoneymarkettodeterminetheexchangerateintheshortrun Itanalyzesthelong termeffectsofmonetarychangesonoutputpricesandexpectedfutureexchangerates Slide14 5 Copyright 2003PearsonEducation Inc MoneyDefined ABriefReview MoneyasaMediumofExchangeAgenerallyacceptedmeansofpaymentMoneyasaUnitofAccountAwidelyrecognizedmeasureofvalueMoneyasaStoreofValueAtransferofpurchasingpowerfromthepresentintothefuture Slide14 6 Copyright 2003PearsonEducation Inc WhatIsMoney Assetswidelyusedandacceptedasameansofpayment Moneyisveryliquid butpayslittleornoreturn Allotherassetsarelessliquidbutpayhigherreturn MoneySupply Ms Ms Currency CheckableDeposits MoneyDefined ABriefReview Slide14 7 Copyright 2003PearsonEducation Inc HowtheMoneySupplyIsDeterminedAneconomy smoneysupplyiscontrolledbyitscentralbank Thecentralbank DirectlyregulatestheamountofcurrencyinexistenceIndirectlycontrolstheamountofcheckingdepositsissuedbyprivatebanks MoneyDefined ABriefReview Slide14 8 Copyright 2003PearsonEducation Inc Threefactorsinfluencemoneydemand ExpectedreturnRiskLiquidityExpectedReturnTheinterestratemeasurestheopportunitycostofholdingmoneyratherthaninterest bearingbonds Ariseintheinterestrateraisesthecostofholdingmoneyandcausesmoneydemandtofall TheDemandforMoneybyIndividuals Slide14 9 Copyright 2003PearsonEducation Inc RiskHoldingmoneyisrisky Anunexpectedincreaseinthepricesofgoodsandservicescouldreducethevalueofmoneyintermsofthecommoditiesconsumed Changesintheriskofholdingmoneyneednotcauseindividualstoreducetheirdemandformoney Anychangeintheriskinessofmoneycausesanequalchangeintheriskinessofbonds TheDemandforMoneybyIndividuals Slide14 10 Copyright 2003PearsonEducation Inc LiquidityThemainbenefitofholdingmoneycomesfromitsliquidity Householdsandfirmsholdmoneybecauseitistheeasiestwayoffinancingtheireverydaypurchases Ariseintheaveragevalueoftransactionscarriedoutbyahouseholdorfirmcausesitsdemandformoneytorise TheDemandforMoneybyIndividuals Slide14 11 Copyright 2003PearsonEducation Inc AggregateMoneyDemand AggregatemoneydemandThetotaldemandformoneybyallhouseholdsandfirmsintheeconomy Itisdeterminedbythreemainfactors InterestrateItreducesthedemandformoney PricelevelItraisesthedemandformoney RealnationalincomeItraisesthedemandformoney Slide14 12 Copyright 2003PearsonEducation Inc Theaggregatedemandformoneycanbeexpressedby Md PxL R Y 14 1 where PisthepricelevelYisrealnationalincomeL R Y istheaggregaterealmoneydemandEquation 14 1 canalsobewrittenas Md P L R Y 14 2 AggregateMoneyDemand Slide14 13 Copyright 2003PearsonEducation Inc Figure14 1 AggregateRealMoneyDemandandtheInterestRate AggregateMoneyDemand Slide14 14 Copyright 2003PearsonEducation Inc Figure14 2 EffectontheAggregateRealMoneyDemandScheduleofaRiseinRealIncome AggregateMoneyDemand Slide14 15 Copyright 2003PearsonEducation Inc EquilibriumintheMoneyMarketTheconditionforequilibriuminthemoneymarketis Ms Md 14 3 Themoneymarketequilibriumconditioncanbeexpressedintermsofaggregaterealmoneydemandas Ms P L R Y 14 4 TheEquilibriumInterestRate TheInteractionofMoneySupplyandDemand Slide14 16 Copyright 2003PearsonEducation Inc TheEquilibriumInterestRate TheInteractionofMoneySupplyandDemand Figure14 3 DeterminationoftheEquilibriumInterestRate Realmoneysupply R1 1 Slide14 17 Copyright 2003PearsonEducation Inc InterestRatesandtheMoneySupplyAnincrease fall inthemoneysupplylowers raises theinterestrate giventhepricelevelandoutput TheeffectofincreasingthemoneysupplyatagivenpricelevelisillustratedinFigure14 4 TheEquilibriumInterestRate TheInteractionofMoneySupplyandDemand Slide14 18 Copyright 2003PearsonEducation Inc TheEquilibriumInterestRate TheInteractionofMoneySupplyandDemand Figure14 4 EffectofanIncreaseintheMoneySupplyontheInterestRate Slide14 19 Copyright 2003PearsonEducation Inc OutputandtheInterestRateAnincrease fall inrealoutputraises lowers theinterestrate giventhepricelevelandthemoneysupply Figure14 5showstheeffectontheinterestrateofariseinthelevelofoutput giventhemoneysupplyandthepricelevel TheEquilibriumInterestRate TheInteractionofMoneySupplyandDemand Slide14 20 Copyright 2003PearsonEducation Inc TheEquilibriumInterestRate TheInteractionofMoneySupplyandDemand Figure14 5 EffectontheInterestRateofaRiseinRealIncome Slide14 21 Copyright 2003PearsonEducation Inc TheMoneySupplyandtheExchangeRateintheShortRun ShortrunanalysisThepricelevelandtherealoutputaregiven LongrunanalysisThepricelevelisperfectlyflexibleandalwaysadjustedimmediatelytopreservefullemployment Slide14 22 Copyright 2003PearsonEducation Inc LinkingMoney theInterestRate andtheExchangeRateTheU S moneymarketdeterminesthedollarinterestrate whichinturnaffectstheexchangeratethatmaintainstheinterestparity Figure14 6linkstheU S moneymarket bottom andtheforeignexchangemarket top TheMoneySupplyandtheExchangeRateintheShortRun Slide14 23 Copyright 2003PearsonEducation Inc TheEquilibriumInterestRate TheInteractionofMoneySupplyandDemand Figure14 6 SimultaneousEquilibriumintheU S MoneyMarketandtheForeign ExchangeMarket Returnondollardeposits Expectedreturnoneurodeposits Slide14 24 Copyright 2003PearsonEducation Inc TheEquilibriumInterestRate TheInteractionofMoneySupplyandDemand Figure14 7 Money Market ExchangeRateLinkages Europeanmoneymarket UnitedStatesmoneymarket EuropeEuropeanSystemofCentralBanks UnitedStatesFederalReserveSystem R Dollarinterestrate R Eurointerestrate Foreignexchangemarket E Dollar Euroexchangerate Slide14 25 Copyright 2003PearsonEducation Inc U S MoneySupplyandtheDollar EuroExchangeRateWhathappenswhentheFederalReservechangestheU S moneysupply Anincrease decrease inacountry smoneysupplycausesitscurrencytodepreciate appreciate intheforeignexchangemarket TheEquilibriumInterestRate TheInteractionofMoneySupplyandDemand Slide14 26 Copyright 2003PearsonEducation Inc Expectedreturnoneurodeposits TheEquilibriumInterestRate TheInteractionofMoneySupplyandDemand Figure14 8 EffectontheDollar EuroExchangeRateandDollarInterestRateofanIncreaseintheU S MoneySupply Returnondollardeposits E1 1 M2USPUS Slide14 27 Copyright 2003PearsonEducation Inc Europe sMoneySupplyandtheDollar EuroExchangeRateAnincreaseinEurope smoneysupplycausesadepreciationoftheeuro i e appreciationofthedollar AreductioninEurope smoneysupplycausesanappreciationoftheeuro i e adepreciationofthedollar ThechangeintheEuropeanmoneysupplydoesnotdisturbtheU S moneymarketequilibrium TheEquilibriumInterestRate TheInteractionofMoneySupplyandDemand Slide14 28 Copyright 2003PearsonEducation Inc Figure14 9 EffectofanIncreaseintheEuropeanMoneySupplyontheDollar EuroExchangeRate IncreaseinEuropeanmoneysupply E1 1 Dollarreturn TheEquilibriumInterestRate TheInteractionofMoneySupplyandDemand E2 2 Slide14 29 Copyright 2003PearsonEducation Inc Money thePriceLevel andtheExchangeRateintheLongRun Long runequilibriumPricesareperfectlyflexibleandalwaysadjustedimmediatelytopreservefullemployment MoneyandMoneyPricesThemoneymarketequilibrium Equation14 4 canberearrangedtogivethelong runequilibriumpricelevel P Ms L R Y 14 5 Anincreaseinacountry smoneysupplycausesaproportionalincreaseinitspricelevel Slide14 30 Copyright 2003PearsonEducation Inc TheLong RunEffectsofMoneySupplyChangesAchangeinthesupplyofmoneyhasnoeffectonthelong runvaluesoftheinterestrateorrealoutput Apermanentincreaseinthemoneysupplycausesaproportionalincreaseinthepricelevel slong runvalue Thispredictionisbasedonthemoneymarketequilibriumcondition Ms P LorP Ms L Thisconditionimpliesthat P P Ms Ms L L Theinflationrateequalsthemonetarygrowthratelessthegrowthrateformoneydemand Money thePriceLevel andtheExchangeRateintheLongRun Slide14 31 Copyright 2003PearsonEducation Inc EmpiricalEvidenceonMoneySuppliesandPriceLevelsInacross sectionofcountries long termchangesinmoneysuppliesandpricelevelsshowaclearpositivecorrelation Money thePriceLevel andtheExchangeRateintheLongRun Slide14 32 Copyright 2003PearsonEducation Inc Figure14 10 MonetaryGrowthandPrice LevelChangeintheSevenMainIndustrialCountries 1973 1997 Money thePriceLevel andtheExchangeRateintheLongRun Slide14 33 Copyright 2003PearsonEducation Inc MoneyandtheExchangeRateintheLongRunApermanentincrease decrease inacountry smoneysupplycausesaproportionallong rundepreciation appreciation ofitscurrencyagainstforeigncurrencies Money thePriceLevel andtheExchangeRateintheLongRun Slide14 34 Copyright 2003PearsonEducation Inc InflationandExchangeRateDynamics InflationAsituationwhereaneconomy spricelevelrises DeflationAsituationwhereaneconomy spricelevelfalls Short RunPriceRigidityversusLong RunPriceFlexibilityTheshort run stickiness ofpricelevelsisillustratedinFigure14 11 Slide14 35 Copyright 2003PearsonEducation Inc Figure14 11 Month to MonthVariabilityoftheDollar DMExchangeRateandoftheU S GermanPrice LevelRatio 1974 2001 InflationandExchangeRateDynamics Slide14 36 Copyright 2003PearsonEducation Inc Achangeinthemoneysupplycreatesdemandandcostpressuresthatleadtofutureincreasesinthepricelevelfromthreemainsources ExcessdemandforoutputandlaborInflationaryexpectationsRawmaterialsprices InflationandExchangeRateDynamics Slide14 37 Copyright 2003PearsonEducation Inc PermanentMoneySupplyChangesandtheExchangeRateHowdoesthedollar euroexchangerateadjusttoapermanentincreaseintheU S moneysupply Figure14 12showsboththeshort runandlong runeffectsoftheincreaseintheU S moneysupply InflationandExchangeRateDynamics Slide14 38 Copyright 2003PearsonEducation Inc Figure14 12 EffectsofanIncreaseintheU S MoneySupply Dollarreturn M2USP1US U S realmoneysupply E2 E3 InflationandExchangeRateDynamics 3 Expectedeuroreturn E1 1 Slide14 39 Copyright 2003PearsonEducation Inc Figure14 13 TimePathsofU S EconomicVariablesAfteraPermanentIncreaseintheU S M