布兰查德 宏观经济学 第四版 第20章

1、 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard1 of 32Output, the Interest Rate,and the Exchange RateThe 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 deter

2、mines the exchange rate?How can policy makers affect exchange rates? 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard2 of 32Equilibrium in the Goods MarketEquilibrium in the goods market can be described by the following equations:20-1 2006 Prentice Hall Business Publishi

3、ng Macroeconomics, 4/e Olivier Blanchard3 of 32Equilibrium in the Goods MarketConsumption 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

4、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 . 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard4 of 32Equilibrium in the Goods MarketThe main implication of this equation

5、 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 i

6、n demand toward foreign goods, and to a decrease in net exports. 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard5 of 32Equilibrium in the Goods MarketIn this chapter we make two simplifications:Both the domestic and the foreign price levels are given; thus, the nominal a

7、nd the real exchange rate move together:There is no inflation, neither actual nor expected.Then, the equilibrium condition becomes: 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard6 of 32Equilibrium in Financial markets20-2Now that we look at a financially open economy, w

8、e must also take into account the fact that people have a choice between domestic bonds and foreign bonds. 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard7 of 32Money Versus BondsWe wrote the condition that the supply of money be equal to the demand for money as:We can u

9、se this equation to think about the determination of the nominal interest rate in an open economy. 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard8 of 32Domestic Bonds Versus Foreign BondsWhat combination of domestic and foreign bonds should financial investors choose in

10、 order to maximize expected returns?The left side gives the return, in terms of domestic currency. The right side gives the expected return, also in terms of domestic currency. In equilibrium, the two expected returns must be equal. 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier

11、Blanchard9 of 32Domestic Bonds Versus Foreign BondsIf the expected future exchange rate is given, then:The current exchange rate is: 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard10 of 32Domestic Bonds Versus Foreign BondsAn increase in the U.S. interest rate, say, afte

12、r a monetary contraction, will cause the U.S. interest rate to increase, and the demand for U.S. bonds to rise. As investors switch from foreign currency to dollars, the dollar appreciates.The more the dollar appreciates, the more investors expect it to depreciate in the future.The initial dollar ap

13、preciation must be such that the expected future depreciation compensates for the increase in the U.S. interest rate. When this is the case, investors are again indifferent and equilibrium prevails. 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard11 of 32Domestic Bonds Ve

14、rsus Foreign BondsThe Relation Between the Interest Rate and the Exchange Rate Implied by Interest ParityA higher domestic interest rate leads to a higher exchange rate an appreciation.Figure 20 - 1 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard12 of 32Putting Goods and

15、Financial Markets TogetherGoods-market equilibrium implies that output depends, among other factors, on the interest rate and the exchange rate.20-3 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard13 of 32Putting Goods andFinancial Markets TogetherThe interest rate is det

16、ermined by the equality of money supply and money demand:The interest-parity condition implies a negative relation between the domestic interest rate and the exchange rate: 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard14 of 32Putting Goods andFinancial Markets Together

17、The open-economy versions of the IS and LM relations are:Changes in the interest rate affect the economy directly through investment,indirectly through the exchange rate. 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard15 of 32Putting Goods andFinancial Markets TogetherTh

18、e IS-LM Model in the Open EconomyAn increase in the interest rate reduces output both directly and indirectly (through the exchange rate). The IS curve is downward sloping. Given the real money stock, an increase in output increases the interest rate: The LM curve is upward sloping.Figure 20 - 2 200

19、6 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard16 of 32The Effects of Policyin an Open EconomyThe Effects of an Increase in Government SpendingAn increase in government spending leads to an increase in output, an increase in the interest rate, and an appreciation.The increa

20、se in government spending shifts the IS curve to the right. It shifts neither the LM curve nor the interest-parity curve.20-4Figure 20 - 3 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard17 of 32The Effects of Policyin an Open EconomyCan we tell what happens to the variou

21、s components of demand for money when the government increases spending:Consumption and government spending both go up.The effect of government spending on investment was ambiguous in the closed economy, it remains ambiguous in the open economy.Both the increase in output and the appreciation combin

22、e to decrease net exports. 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard18 of 32The Effects of Monetary Policyin an Open EconomyThe Effects of a Monetary ContractionA monetary contraction leads to a decrease in output, an increase in the interest rate, and an appreciat

23、ion.A monetary contraction shifts the LM curve up. It shifts neither the IS curve nor the interest-parity curve.Figure 20 - 4 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard19 of 32Table 1 The Emergence of Large U.S. Budget Deficits, 1980-198419801981198219831984Spending

24、22.022.824.025.023.7Revenues20.220.820.519.419.2 Personal taxes9.49.69.98.88.2 Corporate taxes2.62.31.61.62.0Budget surplus (-:deficit)1.82.03.55.64.5Numbers are for fiscal years, which start in October of the previous calendar year. All numbers are expressed as a percentage of GDP.Monetary Contract

25、ion, and Fiscal Expansion: The United States in the Early 1980s 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard20 of 32Supply sidersa group of economists who argued that a cut in tax rates would boost economic activity.High output growth and dollar appreciation during th

26、e early 1980s resulted in an increase in the trade deficit. A higher trade deficit, combined with a large budget deficit, became know as the twin deficits of the 1980s.Monetary Contraction, and Fiscal Expansion: The United States in the Early 1980s 2006 Prentice Hall Business Publishing Macroeconomi

27、cs, 4/e Olivier Blanchard21 of 32Table 2Major U.S. Macroeconomic Variables, 1980-198419801981198219831984GDP Growth (%)0.51.82.23.96.2Unemployment rate (%)7.17.69.79.67.5Inflation (CPI) (%)12.58.93.83.83.9Interest rate (nominal) (%)11.514.010.68.69.6(real) (%)2.54.96.05.15.9Real exchange rate85 1011

28、11117129Trade surplus (: deficit) (% of GDP)-0.5-0.4-0.6-1.5-2.7Inflation: Rate of change of the CPI. The nominal interest rate is the three-month T-bill rate. The real interest rate is equal to the nominal rate minus the forecast of inflation by DRI, a private forecasting firm. The real exchange ra

29、te is the trade-weighted real exchange rate, normalized so that 1973 = 100Monetary Contraction, and Fiscal Expansion: The United States in the Early 1980s 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard22 of 32Fixed Exchange RatesCentral banks act under implicit and expl

30、icit exchange-rate targets and use monetary policy to achieve those targets.20-5 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard23 of 32Pegs, Crawling Pegs, Bonds, the EMS, and the EuroSome countries operate under fixed exchange rates. These countries maintain a fixed ex

31、change rate in terms of some foreign currency. Some peg their currency to the dollar. Some countries operate under a crawling peg. These countries typically have inflation rates that exceed the U.S. inflation rate. 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard24 of 32P

32、egs, Crawling Pegs, Bonds, the EMS, and the EuroSome countries maintain their bilateral exchange rates within some bands. The most prominent example is the European Monetary System (EMS). Under the EMS rules, member countries agreed to maintain their exchange rate vis-vis the other currencies in the

33、 system within narrow limits or bands around a central parity.Some countries moved further, agreeing to adopt a common currency, the Euro, in effect, adopting a “fixed exchange rate.” 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard25 of 32Pegging the Exchange Rate,and Mo

34、netary ControlThe interest parity condition is:Pegging the exchange rate turns the interest parity relation into: 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard26 of 32Pegging the Exchange Rate,and Monetary ControlIncreases in the domestic demand for money must be match

35、ed by increases in the supply of money in order to maintain the interest rate constant, so that the following condition holds:In words: Under a fixed exchange rate and perfect capital mobility, the domestic interest rate must be equal to the foreign interest rate. 2006 Prentice Hall Business Publish

36、ing Macroeconomics, 4/e Olivier Blanchard27 of 32Fiscal Policy UnderFixed Exchange RatesThe Effects of a Fiscal Expansion Under Fixed Exchange RatesUnder flexible exchange rates, a fiscal expansion increases output, from YA to YB. Under fixed exchange rates, output increases from YA to YC.The centra

37、l bank must accommodate the resulting increase in the demand for money.Figure 20 - 5 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard28 of 32Fiscal Policy UnderFixed Exchange RatesThere are a number of reasons why countries choosing to fix its interest rate appears to be

38、a bad idea:By fixing the exchange rate, a country gives up a powerful tool for correcting trade imbalances or changing the level of economic activity.By committing to a particular exchange rate, a country also gives up control of its interest rate, and they must match movements in the foreign interest rate risking unwanted effects on its own activity. 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard29 of 32Fiscal Policy UnderFixed Exchange RatesThere are a number of reasons