中文曼昆宏观经济学第七版讲义课件

Inthischapter,youwilllearn:accountingidentitiesfortheopeneconomythesmallopeneconomymodelwhatmakesit“small”howthetradebalanceandexchangeratearedeterminedhowpoliciesaffecttradebalance&exchangerateInthischapter,youwilllearImportsandexports(%ofGDP),2019Importsandexports(%ofGDP)Inanopeneconomy,spendingneednotequaloutputsavingneednotequalinvestmentInanopeneconomy,spendingnePreliminariesEX=exports=

foreignspendingondomesticgoodsIM=imports=C

f

+I

f

+G

f

=spendingonforeigngoodsNX=netexports(a.k.a.the“tradebalance”)

=EX–IMsuperscripts:d= spendingondomesticgoodsf= spendingonforeigngoodsPreliminariesEX=exports=

fGDP=expenditureon

domesticallyproducedg&sGDP=expenditureon

domesticThenationalincomeidentity

inanopeneconomyY=C+I+G+NXor,NX

=Y

–

(C

+I

+G

)netexportsdomesticspendingoutputThenationalincomeidentity

Tradesurplusesanddeficitstradesurplus:

output>spendingandexports>imports

Sizeofthetradesurplus=NXtradedeficit:

spending>outputandimports>exports

Sizeofthetradedeficit=–NXNX=EX–IM=Y

–

(C

+I+G)TradesurplusesanddeficitstrInternationalcapitalflowsNetcapitaloutflow= S–I= netoutflowof“loanablefunds”= netpurchasesofforeignassets

thecountry’spurchasesofforeignassets

minusforeignpurchasesofdomesticassetsWhenS>I,countryisanetlenderWhenS<I,countryisanetborrowerInternationalcapitalflowsNetThelinkbetweentrade&cap.flowsNX

=Y

–

(C

+I

+G) implies

NX =(Y

–C

–G)–I

=S–Itradebalance=netcapitaloutflowThus,

acountrywithatradedeficit(NX<0)

isanetborrower(S<

I).Thelinkbetweentrade&cap.Saving,investment,andthetradebalance(percentofGDP)1960-2019tradebalance(rightscale)savinginvestmentSaving,investment,andthetrU.S.:“Theworld’slargestdebtornation”Everyyearsince1980s:hugetradedeficitsand

netcapitalinflows,i.e.netborrowingfromabroadAsof12/31/2009:U.S.residentsowned$18.4trillionworthofforeignassetsForeignersowned$21.1trillionworthof

U.S.assetsU.S.netindebtednesstorestoftheworld:

$2.7trillion--higherthananyothercountry,henceU.S.isthe“world’slargestdebtornation”U.S.:“Theworld’slargestdebSavingandinvestmentina

smallopeneconomyAnopen-economyversionoftheloanablefundsmodelfromChapter3.Includesmanyofthesameelements:productionfunctionconsumptionfunctioninvestmentfunctionexogenouspolicyvariablesSavingandinvestmentina

smNationalsaving:

ThesupplyofloanablefundsrS,IAsinChapter3,

nationalsavingdoesnotdependontheinterestrateNationalsaving:

ThesupplyAssumptionsaboutcapitalflowsa. domestic&foreignbondsareperfectsubstitutes(samerisk,maturity,etc.)b. perfectcapitalmobility:

norestrictionsoninternationaltradeinassetsc. economyissmall:

cannotaffecttheworldinterestrate,denotedr*a&bimplyr=r*cimpliesr*

isexogenousAssumptionsaboutcapitalflowInvestment:

ThedemandforloanablefundsInvestmentisstilla

downward-slopingfunction

oftheinterestrate,r

*buttheexogenous

worldinterestrate……determinesthe

country’slevelof

investment.I

(r*

)rS,II

(r

)Investment:

ThedemandforlIftheeconomywereclosed…rS,II

(r

)rc…theinterestratewouldadjustto

equate

investment

andsaving:Iftheeconomywereclosed…rS,Butinasmallopeneconomy…rS,II

(r

)rcr*I

1theexogenousworldinterestratedeterminesinvestment……andthedifferencebetweensavingandinvestmentdeterminesnetcapitaloutflowandnetexportsNXButinasmallopeneconomy…rSNext,threeexperiments:1.

Fiscalpolicyathome2.

Fiscalpolicyabroad3.

Anincreaseininvestmentdemand

(exercise)Next,threeexperiments:1. Fis1.FiscalpolicyathomerS,II

(r

)I

1AnincreaseinGordecreaseinTreducessaving.NX1NX2Results:

1.FiscalpolicyathomerS,INXandthefederalbudgetdeficit

(%ofGDP),1965-2009-6%-4%-2%0%2%-4%-2%0%2%4%6%8%1965197019751980198519902019200020192019Netexports

(rightscale)Budgetdeficit

(leftscale)NXandthefederalbudgetdefi2.FiscalpolicyabroadrS,II

(r

)Expansionaryfiscalpolicyabroadraisestheworldinterestrate.NX1NX2Results:

2.FiscalpolicyabroadrS,IINOWYOUTRY:

3.AnincreaseininvestmentdemandrS,II

(r

)1UsethemodeltodeterminetheimpactofanincreaseininvestmentdemandonNX,S,I,and

netcapitaloutflow.NX1I

1SNOWYOUTRY:

3.AnincreaseANSWERS:

3.AnincreaseininvestmentdemandrS,II

(r

)1I>0,S=0,netcapitaloutflowandNX

fall

bythe

amountI

NX2NX1I

1I

2SI

(r

)2ANSWERS:

3.AnincreaseinThenominalexchangeratee= nominalexchangerate,

therelativepriceof

domesticcurrency

intermsofforeigncurrency (e.g.YenperDollar)Thenominalexchangeratee=Afewexchangerates,asof11/01/2019countryexchangerateEuroarea0.72Euro/$Indonesia8,930Rupiahs/$Japan80.6Yen/$Mexico12.4Pesos/$Russia30.8Rubles/$SouthAfrica7.0Rand/$U.K.0.62Pounds/$Afewexchangerates,asof11Therealexchangerate

= realexchangerate,

therelativepriceof

domesticgoods

intermsofforeigngoods (e.g.JapaneseBigMacsperU.S.BigMac)thelowercaseGreekletterepsilonεTherealexchangerate= rUnderstandingtheunitsofεεUnderstandingtheunitsofεεonegood:BigMacpriceinJapan:

P*=200YenpriceinUSA:

P=$2.50nominalexchangerate

e=120Yen/$TobuyaU.S.BigMac,someonefromJapan

wouldhavetopayanamountthatcouldbuy

1.5JapaneseBigMacs.ε~McZample~onegood:BigMacTobuyaU.Sεintherealworld&ourmodelIntherealworld:

Wecanthinkofεastherelativepriceof

abasketofdomesticgoodsintermsofabasketofforeigngoodsInourmacromodel:

There’sjustonegood,“output.”

Soεistherelativepriceofonecountry’soutputintermsoftheothercountry’soutputεintherealworld&ourmodHowNXdependsonε

ε

U.S.goodsbecomemoreexpensiverelativetoforeigngoods

EX,IM

NXHowNXdependsonεε U.U.S.netexportsandtherealexchangerate,1973-2009NX(%ofGDP)Index(March1973=100)020406080100120140-8%-6%-4%-2%0%2%4%197019751980198519902019200020192019Netexports

(leftscale)Trade-weightedrealexchangerateindexU.S.netexportsandtherealThenetexportsfunctionThenetexportsfunctionreflectsthisinverserelationshipbetweenNXandε

:

NX=NX(ε

)ThenetexportsfunctionTheneTheNXcurvefortheU.S.0NXεNX

(ε)ε1Whenεisrelativelylow,

U.S.goodsarerelativelyinexpensiveNX(ε1)soU.S.netexportswill

behighTheNXcurvefortheU.S.0NXεNTheNXcurvefortheU.S.0NXεNX

(ε)ε2Athighenoughvaluesof

ε,

U.S.goodsbecomesoexpensivethatNX(ε2)weexportlessthanweimportTheNXcurvefortheU.S.0NXεNHowεisdeterminedTheaccountingidentitysaysNX=S

–

IWesawearlierhowS

–

Iisdetermined:Sdependsondomesticfactors(output,fiscalpolicyvariables,etc)Iisdeterminedbytheworldinterest

rater

*So,ε

mustadjusttoensureHowεisdeterminedTheaccounHowεisdeterminedNeitherS

norIdependonε,

sothenetcapitaloutflowcurveisvertical.εNXNX(ε

)εadjuststoequateNX

withnetcapitaloutflow,S

-

I.ε

1NX

1HowεisdeterminedNeitherSInterpretation:supplyanddemand

intheforeignexchangemarketdemand:

ForeignersneeddollarstobuyU.S.netexports.εNXNX(ε

)supply:Netcapitaloutflow(S

-

I

)

isthesupplyofdollarstobeinvestedabroad.ε

1NX

1Interpretation:supplyanddeNext,fourexperiments:1.

Fiscalpolicyathome2.

Fiscalpolicyabroad3.

Anincreaseininvestmentdemand

(exercise)4.

TradepolicytorestrictimportsNext,fourexperiments:1. Fisc1.FiscalpolicyathomeAfiscalexpansionreducesnationalsaving,netcapitaloutflow,andthesupplyofdollars

intheforeignexchangemarket……causingtherealexchangeratetoriseandNXtofall.εNXNX(ε

)ε

1NX

1NX

2ε

21.FiscalpolicyathomeAfis2.FiscalpolicyabroadAnincreaseinr*reducesinvestment,increasingnetcapitaloutflowandthesupplyofdollarsintheforeignexchangemarket……causingtherealexchangeratetofallandNXtorise.εNXNX(ε

)NX

1ε

1ε

2NX

22.FiscalpolicyabroadAnincNOWYOUTRY:

3.IncreaseininvestmentdemandNX(ε

)ε

1NX

1εNXDeterminetheimpactofanincreaseininvestmentdemandonnetexports,netcapitaloutflow,

andtherealexchangerateNOWYOUTRY:

3.IncreaseinANSWERS:

3.IncreaseininvestmentdemandAnincreaseininvestmentreducesnetcapitaloutflowandthesupply

ofdollarsintheforeignexchangemarket…NX(ε

)ε

1NX

1NX

2ε

2εNX…causingtherealexchangeratetoriseandNXtofall.ANSWERS:

3.Increaseininv4.

TradepolicytorestrictimportsεNXNX

(ε

)1NX1ε

1NX

(ε

)2Atanygivenvalueofε,animportquota IM

NX demandfor dollarsshifts rightTradepolicydoesn’taffectSorI

,socapitalflowsandthesupplyofdollarsremainfixed.ε

24.Tradepolicytorestricti4.

TradepolicytorestrictimportsεNXNX

(ε

)1NX1ε

1NX

(ε

)2Results:ε

>0

(demandincrease)NX=0

(supplyfixed)IM<0

(policy)EX<0

(riseinε

)ε

24.TradepolicytorestrictiThedeterminantsofthe

nominalexchangerateStartwiththeexpressionfortherealexchangerate:Solveforthenominalexchangerate:Thedeterminantsofthe

nominThedeterminantsofthe

nominalexchangerateSoe

dependsontherealexchangerateandthepricelevelsathomeandabroad……andweknowhoweach

ofthemisdetermined:Thedeterminantsofthe

nominThedeterminantsofthe

nominalexchangerateRewritethisequationingrowthrates

(see“arithmetictricksforworkingwithpercentagechanges,”Chap2):Foragivenvalueofε,

thegrowthrateofeequalsthedifferencebetweenforeignanddomesticinflationrates.Thedeterminantsofthe

nominInflationdifferentialsandnominalexchangeratesforacrosssectionofcountries%changeinnominalexchangerateinflationdifferentialIcelandMexicoU.K.S.KoreaJapanSingaporeCanadaAustraliaS.AfricaPakistanInflationdifferentialsandnoPurchasingPowerParity(PPP)Twodefinitions:Adoctrinethatstatesthatgoodsmustsellatthesame(currency-adjusted)priceinallcountries.Thenominalexchangerateadjuststoequalizethecostofabasketofgoodsacrosscountries.Reasoning:arbitrage,thelawofonepricePurchasingPowerParity(PPP)TPurchasingPowerParity(PPP)PPP: eP=P*

Costofabasketofdomesticgoods,inforeigncurrency.Costofabasketofdomesticgoods,indomesticcurrency.Costofabasketofforeigngoods,inforeigncurrency.Solvefore: e=P*/P

PPPimpliesthatthenominalexchangeratebetweentwocountriesequalstheratioofthecountries’pricelevels.PurchasingPowerParity(PPP)PPurchasingPowerParity(PPP)Ife=P*/P,

thenandtheNXcurveishorizontal:εNXNXε

=1S

-

IUnderPPP,changesin

(S–

I)havenoimpactonε

ore.PurchasingPowerParity(PPP)IDoesPPPholdintherealworld?No,fortworeasons:1. Internationalarbitragenotpossible.nontradedgoodstransportationcosts2. Differentcountries’goodsnotperfectsubstitutes.Yet,PPPisausefultheory:It’ssimple&intuitive.Intherealworld,nominalexchangerates

tendtowardtheirPPPvaluesoverthelongrun.DoesPPPholdintherealworlnochangenochangenochangenochange129.4-2.019.46.317.43.9115.1-0.319.91.119.62.2closedeconomysmallopeneconomyactualchangeεNXIrSG–T1980s1970sData:decadeaverages;allexceptrandεareexpressedasapercentofGDP;εisatrade-weightedindex.

CASESTUDY:

TheReagandeficitsrevisitednochangenochangenochaTheU.S.asalargeopeneconomySofar,we’velearnedlong-runmodelsfor

twoextremecases:closedeconomy(chap.3)smallopeneconomy(chap.5)Alargeopeneconomy–liketheU.S.–falls

betweenthesetwoextremes.Theresultsfromlargeopeneconomyanalysis

areamixtureoftheresultsforthe

closed&smallopeneconomycases.Forexample…TheU.S.asalargeopeneconoNXIrlargeopen

economysmallopeneconomyclosedeconomyAfiscalexpansioninthreemodelsfalls,butnotasmuchasinsmallopeneconomyfallsno

changefalls,butnotasmuch

asinclosedeconomyno

changefallsrises,butnotasmuch

asinclosedeconomyno

changerisesAfiscalexpansioncausesnationalsavingtofall.

Theeffectsofthisdependonopenness&size:NXIrlargeopen

economysmalloChapterSummaryNetexports--thedifferencebetweenexportsandimpor