Bài giảng Kinh tế vĩ mô nâng cao: Chapter 20 - TS. Phan Thế Công

Bài giảng "Kinh tế vĩ mô nâng cao - Chapter 20: Mô hình IS – LM - BP" cung cấp cho người học các kiến thức: The market for foreign currency exchange, marginal propensity to import, output determination in open economy, balance of payments, BP curve, is lm bp model, monetary and fiscal policies in open economy. Mời các bạn cùng tham khảo.
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Bài giảng Kinh tế vĩ mô nâng cao: Chapter 20 - TS. Phan Thế Công1/4/2016MÔ HÌNH IS – LM - BPTS.GVC. PHAN THẾ CÔNGEmail: congpt@vcu.edu.vnTS. PHAN THẾ CÔNGTopics To Be Covered•••••••The Market for Foreign-Currency ExchangeMarginal Propensity to ImportOutput Determination in Open EconomyBalance of PaymentsBP CurveIS-LM-BP ModelMonetary and Fiscal Policies in Open EconomyTS. PHAN THẾ CÔNGOpen and Closed Economies• A closed economy is one that does notinteract with other economies in the world.There are no exports, no imports, and nocapital flows.• An open economy is one that interacts freelywith other economies around the world.11/4/2016TS. PHAN THẾ CÔNGAn Open EconomyAn open economy interacts with othercountries in two ways.It buys and sells goods and services in worldproduct markets.It buys and sells capital assets in worldfinancial markets.TS. PHAN THẾ CÔNGThe Flow of Goods••Exports are domestically produced goodsand services that are sold abroad. Theymainly depend on exchange rates.EX = f (e)Imports are foreign produced goods andservices that are sold domestically. Theymainly depend on output.IM = f (Y)TS. PHAN THẾ CÔNGThe Flow of Goods••Net exports (NX) are the value of a nation’sexports minus the value of its imports.Net exports are also called the tradebalance.21/4/2016TS. PHAN THẾ CÔNGThe Flow of Goods A trade deficit is a situation in which net exports(NX) are negative.Imports > Exports A trade surplus is a situation in which netexports (NX) are positive.Exports > Imports Balanced trade refers to when net exports arezero – exports and imports are exactly equal.TS. PHAN THẾ CÔNGThe Internationalization ofPercentthe Chinese Economyof GDP504030201001950 195519601965197019751980 1985 1990 1995 2000TS. PHAN THẾ CÔNGThe Flow of Capital• Net foreign investment refers to thepurchase of foreign assets by domesticresidents minus the purchase of domesticassets by foreigners.• A Chinese resident buys stock in the Toyotacorporation and an American buys stock inthe Sohu corporation.31/4/2016TS. PHAN THẾ CÔNGThe Flow of Capital• When a Chinese resident buys stock in IBM,the purchase raises Chinese net foreigninvestment.• When a Japanese resident buys a bondissued by the Chinese government, thepurchase reduces the Chinese net foreigninvestment.TS. PHAN THẾ CÔNGThe Equality of NX and NFI Net exports (NX) and net foreign investment(NFI) are closely linked. For an economy as a whole, NX and NFI mustbalance each other so that:NFI = NX Thisholds true because every transaction thataffects one side must also affect the other sideby the same amount.TS. PHAN THẾ CÔNGSaving, Investment, and theInternational Flows• Net exports is a component of GDP:Y = C + I + G + NX• National saving is the income of the nationthat is left after paying for currentconsumption and government purchases:Y - C - G = I + NX41/4/2016TS. PHAN THẾ CÔNGSaving, Investment, and theInternational Flows• National saving (S) equals Y-C-G so:S = I + NXorSaving=Domestic +ForeignInvestmentInvestmentTS. PHAN THẾ CÔNGReal and NominalExchange Rates• International transactions are influencedby international prices.• The two most important internationalprices are the nominal exchange rateand the real exchange rate.TS. PHAN THẾ CÔNGNominal Exchange RatesThe nominal exchange rate is the rate at which aperson can trade the currency of one country forthe currency of another.The nominal exchange rate is expressed in twoways:In units of foreign currency per one Chinese yuan.And in units of Chinese yuan per one unit of the foreigncurrency.5