宏观经济学ch12

slide0 Learningobjectives TheMundell Flemingmodel IS LMforthesmallopeneconomyCausesandeffectsofinterestratedifferentialsArgumentsforfixedvs floatingexchangeratesTheaggregatedemandcurveforthesmallopeneconomy slide1 TheMundell FlemingModel Keyassumption Smallopeneconomywithperfectcapitalmobility r r Goodsmarketequilibrium theIS curve wheree nominalexchangerate foreigncurrencyperunitofdomesticcurrency slide2 TheIS curve GoodsMarketEq m TheIS curveisdrawnforagivenvalueofr Intuitionfortheslope slide3 TheLM curve MoneyMarketEq m TheLM curveisdrawnforagivenvalueofr isverticalbecause givenr thereisonlyonevalueofYthatequatesmoneydemandwithsupply regardlessofe slide4 EquilibriumintheMundell Flemingmodel equilibriumexchangerate equilibriumlevelofincome slide5 Floating fixedexchangerates Inasystemoffloatingexchangerates eisallowedtofluctuateinresponsetochangingeconomicconditions Incontrast underfixedexchangerates thecentralbanktradesdomesticforforeigncurrencyatapredeterminedprice Wenowconsiderfiscal monetary andtradepolicy firstinafloatingexchangeratesystem theninafixedexchangeratesystem slide6 Fiscalpolicyunderfloatingexchangerates Y1 Atanygivenvalueofe afiscalexpansionincreasesY shiftingIS totheright Results e 0 Y 0 slide7 Lessonsaboutfiscalpolicy Inasmallopeneconomywithperfectcapitalmobility fiscalpolicyisutterly 完全地 incapableofaffectingrealGDP Crowdingout closedeconomy Fiscalpolicycrowdsoutinvestmentbycausingtheinterestratetorise smallopeneconomy Fiscalpolicycrowdsoutnetexportsbycausingtheexchangeratetoappreciate slide8 Mon policyunderfloatingexchangerates Y2 AnincreaseinMshiftsLM rightbecauseYmustrisetorestoreeq minthemoneymarket Results e0 slide9 Lessonsaboutmonetarypolicy Monetarypolicyaffectsoutputbyaffectingone ormore ofthecomponentsofaggregatedemand closedeconomy M r I Ysmallopeneconomy M e NX YExpansionarymon policydoesnotraiseworldaggregatedemand itshiftsdemandfromforeigntodomesticproducts Thus theincreasesinincomeandemploymentathomecomeattheexpenseoflossesabroad slide10 Tradepolicyunderfloatingexchangerates Atanygivenvalueofe atarifforquotareducesimports increasesNX andshiftsIS totheright Results e 0 Y 0 slide11 Lessonsabouttradepolicy Importrestrictionscannotreduceatradedeficit EventhoughNXisunchanged thereislesstrade thetraderestrictionreducesimportstheexchangerateappreciationreducesexportsLesstrademeansfewer gainsfromtrade Importrestrictionsonspecificproductssavejobsinthedomesticindustriesthatproducethoseproducts butdestroyjobsinexport producingsectors Hence importrestrictionsfailtoincreasetotalemployment Worseyet importrestrictionscreate sectoralshifts whichcausefrictionalunemployment slide12 Fixedexchangerates Underasystemoffixedexchangerates thecountry scentralbankstandsreadytobuyorsellthedomesticcurrencyforforeigncurrencyatapredeterminedrate InthecontextoftheMundell Flemingmodel thecentralbankshiftstheLM curveasrequiredtokeepeatitspreannouncedrate Thissystemfixesthenominalexchangerate Inthelongrun whenpricesareflexible therealexchangeratecanmoveevenifthenominalrateisfixed slide13 Fiscalpolicyunderfixedexchangerates Y1 Underfloatingrates afiscalexpansionwouldraisee Results e 0 Y 0 Y2 Tokeepefromrising thecentralbankmustselldomesticcurrency whichincreasesMandshiftsLM right Underfloatingrates fiscalpolicyineffectiveatchangingoutput Underfixedrates fiscalpolicyisveryeffectiveatchangingoutput slide14 Mon policyunderfixedexchangerates AnincreaseinMwouldshiftLM rightandreducee Topreventthefalline thecentralbankmustbuydomesticcurrency whichreducesMandshiftsLM backleft Results e 0 Y 0 Underfloatingrates monetarypolicyisveryeffectiveatchangingoutput Underfixedrates monetarypolicycannotbeusedtoaffectoutput slide15 Tradepolicyunderfixedexchangerates Arestrictiononimportsputsupwardpressureone Results e 0 Y 0 Y2 Tokeepefromrising thecentralbankmustselldomesticcurrency whichincreasesMandshiftsLM right Underfloatingrates importrestrictionsdonotaffectYorNX Underfixedrates importrestrictionsincreaseYandNX But thesegainscomeattheexpenseofothercountries asthepolicymerelyshiftsdemandfromforeigntodomesticgoods slide16 M F summaryofpolicyeffects slide17 Interest ratedifferentials Tworeasonswhyrmaydifferfromr countryrisk Theriskthatthecountry sborrowerswilldefaultontheirloanrepaymentsbecauseofpoliticaloreconomicturmoil Lendersrequireahigherinterestratetocompensatethemforthisrisk expectedexchangeratechanges Ifacountry sexchangerateisexpectedtofall thenitsborrowersmustpayahigherinterestratetocompensatelendersfortheexpectedcurrencydepreciation slide18 DifferentialsintheM Fmodel where isariskpremium 贴水 SubstitutetheexpressionforrintotheIS andLM equations slide19 Theeffectsofanincreasein IS shiftsleft because r I LM shiftsright because r M P d soYmustrisetorestoremoneymarketeq m Results e0 Y2 slide20 Thefallineisintuitive Anincreaseincountryriskoranexpecteddepreciationmakesholdingthecountry scurrencylessattractive Note anexpecteddepreciationisaself fulfillingprophecy TheincreaseinYoccursbecausetheboostinNX fromthedepreciation isevengreaterthanthefallinI fromtheriseinr Theeffectsofanincreasein slide21 Whyincomemightnotrise ThecentralbankmaytrytopreventthedepreciationbyreducingthemoneysupplyThedepreciationmightboostthepriceofimportsenoughtoincreasethepricelevel whichwouldreducetherealmoneysupply Consumersmightrespondtotheincreasedriskbyholdingmoremoney EachoftheabovewouldshiftLM leftward slide22 CASESTUDY TheMexicanPesoCrisis slide23 CASESTUDY TheMexicanPesoCrisis slide24 ThePesoCrisisdidn tjusthurtMexico U S goodsmoreexpensivetoMexicansU S firmslostrevenueHundredsofbankruptciesalongU S MexborderMexicanassetsworthlessindollarsAffectedretirementsavingsofmillionsofU S citizens slide25 Understandingthecrisis Intheearly1990s Mexicowasanattractiveplaceforforeigninvestment During1994 politicaldevelopmentscausedanincreaseinMexico sriskpremium peasantuprising 暴动 起义 inChiapasAssassination 暗杀 行刺 ofleadingpresidentialcandidateAnotherfactor TheFederalReserveraisedU S interestratesseveraltimesduring1994topreventU S inflation So r 0 slide26 Understandingthecrisis Theseeventsputdownwardpressureonthepeso Mexico scentralbankhadrepeatedlypromisedforeigninvestorsthatitwouldnotallowthepeso svaluetofall soitboughtpesosandsolddollarsto propup thepesoexchangerate DoingthisrequiresthatMexico scentralbankhaveadequatereservesofdollars Didit slide27 DollarreservesofMexico scentralbank December1993 28billionAugust17 1994 17billionDecember1 1994 9billionDecember15 1994 7billion During1994 Mexico scentralbankhidthefactthatitsreserveswerebeingdepleted slide28 thedisaster Dec 20 Mexicodevaluesthepesoby13 fixeseat25centsinsteadof29cents Investorsareshocked andrealizethecentralbankmustberunningoutofreserves InvestorsdumptheirMexicanassetsandpulltheircapitaloutofMexico Dec 22 centralbank sreservesnearlygone Itabandonsthefixedrateandletsefloat Inaweek efallsanother30 slide29 Therescuepackage 1995 U S IMFsetup 50blineofcredittoprovideloanguaranteestoMexico sgovt ThishelpedrestoreconfidenceinMexico reducedtheriskpremium Afterahardrecessionin1995 Mexicobeganastrongrecoveryfromthecrisis slide30 TheS E AsianCrisis slide31 Floatingvs FixedExchangeRates Argumentforfloatingrates allowsmonetarypolicytobeusedtopursueothergoals stablegrowth lowinflation Argumentsforfixedrates avoidsuncertaintyandvolatility 反复无常 makinginternationaltransactionseasierDisciplines 训练 训导 monetarypolicytopreventexcessivemoneygrowth hyperinflation slide32 Mundell FlemingandtheADcurve Previously weexaminedtheM Fmodelwithafixedpricelevel ToderivetheADcurve wenowconsidertheimpactofachangeinPintheM Fmodel WenowwritetheM Fequationsas Earlierinthischapter wecouldwriteNXasafunctionofebecauseeand moveinthesamedirectionwhenPisfixed slide33 Y1 Y2 DerivingtheADcurve AD Y2 Y1 WhyADcurvehasnegativeslope P M P LMshiftsleft NX Y slide34 Fromtheshortruntothelongrun thenthereisdownwardpressureonprices Overtime Pwillmovedown causing M P NX Y slide35 Large betweensmallandclosed Manycountries includingtheU S areneitherclosednorsmallopeneconomies Alargeopeneconomyisinbetweenthepolarcasesofclosed smallopen Consideramonetaryexp