复旦大学【克鲁格曼《国际经济学》第六版英文课件】CH19
国际经济学 (19)
C H A P T E R 19Macroeconomic Policy and Coordination under FloatingExchange Rates浮动汇率下的宏观经济政策和协调A s the Bretton Woods system of fixed exchange rates began to show signs of strain in the late 1960s, many economists recommended that countries allow currency values to be determined freely in the foreign exchange market. When the governments of the industrialized countries adopted floating exchange rates early in 1973, they viewed their step as a temporary emergency measure and were not consciously following the advice of the economists then advocating a permanent floating-rate system. So far, however, it has proved impossible to put the fixed-rate system back together again: The dollar exchange rates of the industrialized countries have continued to float since 1973.The advocates of floating saw ft as a way out of the conflicts between internal and external balance that often arose under the rigid Bretton Woods exchange rates. By the mid-1980s, however, economists and policymakers had become more skeptical about the benefits of an international monetary system based on floating rates. Some critics describe the post-1973 currency arrangements as an international monetary "nonsystem,"a freefor- all in which national macroeconomic policies are frequently at odds. Many observers now think that the current exchange rate system is badly in need of reform. Why has the performance of floating rates been so disappointing, and what direction should reform of the current system take? In this chapter our models of fixed and floating exchange rates are applied to examine the recent performance of floating rates and to compare the macroeconomic policy problems of different exchange rate regimes.Case for Floating Exchange RatesAs international currency crises of increasing scope and frequency erupted in the late 1960s, most economists began advocating greater flexibility of exchange rates. Many argued that a system of floating exchange rates (one in which central banks did not intervene in the foreign exchange market to fix rates) would not only automatically ensure exchange rate flexibility but would also produce several other benefits for the world economy. The case for floating exchange rates rested on three major claims:1. Monetary policy autonomy. If central banks were no longer obliged to intervene in currency markets to fix exchange rates, governments would be able to use monetary policy to reach internal and external balance. Furthermore, no country would be forced to import inflation (or deflation) from abroad.2. Symmetry. Under a system of floating rates the inherent asymmetries of Bretton Woods would disappear and the United States would no longer be able to set world monetary conditions all by itself. At the same time, the United States would have the same opportunity as other countries to influence its exchange rate against foreign currencies.3. Exchange rates as automatic stabilizers. Even in the absence of an active monetary policy, the swift adjustment of market-determined exchange rates would help countriesmaintain internal and external balance in the face of changes in aggregate demand. The long and agonizing periods of speculation preceding exchange rate realignments under the Bretton Woods rules would not occur under floating.Monetary Policy AutonomyUnder the Bretton Woods fixed-rate system, countries other than the United States had little scope to use monetary policy to attain internal and external balance. Monetary policy was weakened by the mechanism of offsetting capital flows (discussed in Chapter 17). A central bank purchase of domestic assets, for example, would put temporary downward pressure on the domestic interest rate and cause the domestic currency to weaken in the foreign exchange market. The exchange rate then had to be propped up through central bank sales of official foreign reserves. Pressure on the interest and exchange rates disappeared, however, only when official reserve losses had driven the domestic money supply back down to its original level. Thus, in the closing years of fixed exchange rates, central banks imposed increasingly stringent restrictions on international payments to keep control over their money supplies. These restrictions were only partially successful in strengthening monetary policy, and they had the damaging side effect of distorting international trade.Advocates of floating rates pointed out that removal of the obligation to peg currency values would restore monetary control to central banks. If, for example, the central bank faced unemployment and wished to expand its money supply in response, there would no longer be any legal barrier to the currency depreciation this would cause. As in the analysis of Chapter 16, the currency depreciation would reduce unemployment by lowering the relative price of domestic products and increasing world demand for them. Similarly, the central bank of an overheated economy could cool down activity by contracting the money supply without worrying that undesired reserve inflows would undermine its stabilization effort. Enhanced control over monetary policy would allow countries to dismantle their distorting barriers to international payments.Advocates of floating also argued that floating rates would allow each country to choose its own desired long-run inflation rate rather than passively importing the inflation rate established abroad. We saw in the last chapter that a country faced with a rise in the foreign price level will be thrown out of balance and ultimately will import the foreign inflation if it holds its exchange rate fixed: By the end of the 1960s many countries felt that they were importing inflation from the United States. By revaluing its currency—that is, by lowering the domestic currency price of foreign currency—a country can insulate itself completely from an inflationary increase in foreign prices, and so remain in internal and external balance. One of the most telling arguments in favor of floating rates was their ability, in theory, to bring about automatically exchange rate changes that insulate economies from ongoing foreign inflation.The mechanism behind this insulation is purchasing power parity (Chapter 15). Recall that when all changes in the world economy are monetary, PPP holds true in the long run: Exchange rates eventually move to offset exactly national differences in inflation. If U.S. monetary growth leads to a long-run doubling of the U.S. price level, while Germany's price level remains constant, PPP predicts that the long-run DM price of the dollar will be halved. This nominal exchange rate change leaves the real exchange rate between thedollar and DM unchanged and thus maintains Germany's internal and external balance. In other words, the long-run exchange rate change predicted by PPP is exactly the change that insulates Germany from U.S. inflation.A money-induced increase in U.S. prices also causes an immediate appreciation of foreign currencies against the dollar when the exchange rate floats. In the short run, the size of this appreciation can differ from what PPP predicts, but the foreign exchange speculators who might have mounted an attack on fixed dollar exchange rates speed the adjustment of floating rates. Since they know foreign currencies will appreciate according to PPP in the long run, they act on their expectations and push exchange rates in the direction of their long-run levels.Countries operating under the Bretton Woods rules were forced to choose between matching U.S. inflation to hold their dollar exchange rates fixed or deliberately revaluing their currencies in proportion to the rise in U.S. prices. Under floating, however, the foreign exchange market automatically brings about the exchange rate changes that shield countries from U.S. inflation. Since this outcome does not require any government policy decisions, the revaluation crises that occurred under fixed exchange rates are avoided.1SymmetryThe second argument put forward by the advocates of floating was that abandonment of the Bretton Woods system would remove the asymmetries that caused so much international disagreement in the 1960s and early 1970s. There were two main asymmetries, both the result of the dollar's central role in the international monetary system. First, because central banks pegged their currencies to the dollar and accumulated dollars as international reserves, the U.S. Federal Reserve played the leading role in determining the world money supply and central banks abroad had little scope to determine their own domestic money supplies. Second, any foreign country could devalue its currency against the dollar in conditions of "fundamental disequilibrium," but the system's rules did not give the United States the option of devaluing against foreign currencies. Thus, when the dollar was at last devalued in December 1971, it was only after a long and economically disruptive period of multilateral negotiation.A system of floating exchange rates, its proponents argued, would do away with these asymmetries. Since countries would no longer peg dollar exchange rates or need to hold dollar reserves for this purpose, each would be in a position to guide monetary conditions at home. For the same reason, the United States would not face any special obstacle to altering its exchange rate through monetary or fiscal policies. All countries' exchange rates would be determined symmetrically by the foreign exchange market, not by government decisions.2Exchange Rates as Automatic Stabilizers1Countries can also avoid importing undesired deflation by floating, since the analysis above goes through, in reverse, for a fall in the foreign price level.2The symmetry argument is not an argument against fixed-rate systems in general, but an argument against the specific type of fixed-exchange rate system that broke down in the early 1970s. As we saw in Chapter 17, a fixed-rate system based on a gold standard can be completely symmetric. The creation of an artificial reserve asset, the SDR, in the late 1960s was an attempt to attain the symmetry of a gold standard without the other drawbacks of that system.The third argument in favor of floating rates concerned their ability, theoretically, to promote swift and relatively painless adjustment to certain types of economic changes. One such change, previously discussed, is foreign inflation. Figure 19-1, which uses the DD-AA model presented in Chapter 16, examines another type of change by comparing the economy's response under a fixed and a floating exchange rate to a temporary fall in foreign demand for its exports.A fall in demand for the home country's exports reduces aggregate demand for every level of the exchange rate, E, and so shifts the DD schedule leftward from DD] to DD2. (Recall that the DD schedule shows exchange rate and output pairs for which aggregate demand equals aggregate output.) Figure 19-la shows how this shift affects the economy's equilibrium when the exchange rate floats. Because the demand shift is assumed to be temporary, it does not change the long-run expected exchange rate and so does not move the asset market equilibrium schedule A A1. (Recall that the/\/\ schedule shows exchange rate and output pairs at which the foreign exchange market and the domestic money market are in equilibrium.) The economy's short-run equilibrium is therefore at point 2; compared with the initial equilibrium at point 1, the currency depreciates (E rises) and output falls. Why does the exchange rate rise from El to E21 As demand and output fall, reducing the transactions demand for money, the home interest rate must also decline to keep the money market in equilibrium. This fall in the home interest rate causes the domestic currency to depreciate in the foreign exchange market, and the exchange rate therefore rises from El to E2.The effect of the same export demand disturbance under a fixed exchange rate is shown in Figure 19-1 b. Since the central bank must prevent the currency depreciation that occurs under a floating rate, it buys domestic money with foreign currency, an action that contracts the money supply and shifts AAl left to AA2. The new short-run equilibrium of the economy under a fixed exchange rate is at point 3, where output equals Y3. Figure 19-1 shows that output actually falls more under a fixed rate than under a floating rate, dropping all the way to K3 rather than Y2. In other words, the movement of the floating exchange rate stabilizes the economy by reducing the shock's effect on employment relative to its effect under a fixed rate. Currency depreciation in the floating rate case makes domestic goods and services cheaper when the demand for them falls, partially offsetting the initial reduction in demand. In addition to reducing the departure from internal balance caused by the fall in export demand, the depreciation reduces the current account deficit that occurs under fixed rates by making domestic products more competitive in international markets.We have considered the case of a transitory fall in export demand, but even stronger conclusions can be drawn when there is a permanent fall in export demand. In this case, the expected exchange rate Ee also rises and AA shifts upward as a result. A permanent shock causes a greater depreciation than a temporary one, and the movement of the exchange rate therefore cushions domestic output more when the shock is permanent. Under the Bretton Woods system, a fall in export demand such as the one shown in Figure 19-lb would, if permanent, have led to a situation of "fundamental disequilibrium" calling for a devaluation of the currency or a long period of domestic unemployment as export prices fell. Uncertainty about the government's intentions would have encouraged speculative capital outflows, further worsening the situation by depleting central bankreserves and contracting the domestic money supply at a time of unemployment. Advocates of floating rates pointed out that the foreign exchange market wouldautomatically bring about the required real currency depreciation through a movement in the nominal exchange rate. This exchange rate change would reduce or eliminate the need to push the price level down through unemployment, and because it would occurimmediately there would be no risk of speculative disruption, as there would be under a fixed rate.The Case Against Floating Exchange RatesThe experience with floating exchange rates between the world wars had left many doubts about how they would function in practice if the Bretton Woods rules were scrapped. Some economists were skeptical of the claims advanced by the advocates of floating and predicted instead that floating rates would have adverse consequences for the world economy. The case against floating rates rested on five main arguments:1. Discipline. Central banks freed from the obligation to fix their exchange rates might embark on inflationary policies. In other words, the "discipline" imposed on individual countries by a fixed rate would be lost.2. Destabilizing speculation and money market disturbances. Speculation on changes in exchange rates could lead to instability in foreign exchange markets, and this instability, in turn, might have negative effects on countries' internal and external balances. Further,disturbances to the home money market could be more disruptive under floating thanunder a fixed rate.3. Injury to international trade and investment. Floating rates would make relative international prices more unpredictable and thus injure international trade and investment.4. Uncoordinated economic policies. If the Bretton Woods rules on exchange rate adjustment were abandoned, the door would be opened to competitive currency practices harmful to the world economy. As happened during the interwar years, countries might adopt policies without considering their possible beggar-thy-neighbor aspects. All countries would suffer as a result.5. The illusion of greater autonomy. Floating exchange rates would not really give countries more policy autonomy. Changes in exchange rates would have such pervasive macroeconomic effects that central banks would feel compelled to intervene heavily in foreign exchange markets even without a formal commitment to peg. Thus, floating would increase the uncertainty in the economy without really giving macroeconomic policy greater freedom.DisciplineProponents of floating rates argue they give governments more freedom in the use of monetary policy. Some critics of floating rates believed that floating rates would lead to license rather than liberty: Freed of the need to worry about losses of foreign reserves, governments might embark on overexpansionary fiscal or monetary policies, falling into the inflation bias trap discussed in Chapter 16 (p. XXX). Factors ranging from political objectives (such as stimulating the economy in time to win an election) to simple incompetence might set off an inflationary spiral. In the minds of those who made the discipline argument, the German hyperinflation of the 1920s epitomized the kind of monetary instability that floating rates might allow.The pro-floaters' response to the discipline criticism was that a floating exchange rate would bottle up inflationary disturbances within the country whose government was misbehaving; it would then be up to its voters, if they wished, to elect a government with better policies. The Bretton Woods arrangements ended up imposing relatively little discipline on the United States, which certainly contributed to the acceleration of worldwide inflation in the late 1960s. Unless a sacrosanct link between currencies and a commodity such as gold were at the center of a system of fixed rates, the system would remain susceptible to human tampering. As discussed in Chapter 17, however, commodity-based monetary standards suffer from difficulties that make them undesirable in practice.Destabilizing Speculation and Money Market DisturbancesAn additional concern arising out of the experience of the interwar period was the possibility that speculation in currency markets might fuel wide gyrations in exchange rates. If foreign exchange traders saw that a currency was depreciating, it was argued, they might sell the currency in the expectation of future depreciation regardless of the currency's longer-term prospects; and as more traders jumped on the bandwagon by selling the currency the expectations of depreciation would be realized. Suchdestabilizing speculation would tend to accentuate the fluctuations around the exchange rate's long-run value that would occur normally as a result of unexpected economic disturbances. Aside from interfering with international trade, destabilizing sales of a weak currency might encourage expectations of future inflation and set off a domestic wage-price spiral that would encourage further depreciation. Countries could be caught in a "vicious circle" of depreciation and inflation that might be difficult to escape. Advocates of floating rates questioned whether destabilizing speculators could stay in business. Anyone who persisted in selling a currency after it had depreciated below its longrun value or in buying a currency after it had appreciated above its long-run value was bound to lose money over the long term. Destabilizing speculators would thus be driven from the market, the pro-floaters argued, and the field would be left to speculators who had avoided long-term losses by speeding the adjustment of exchange rates toward their longrun values.Proponents of floating also pointed out that capital flows could behave in a destabilizing manner under fixed rates. An unexpected central bank reserve loss might set up expectations of a devaluation and spark a reserve hemorrhage as speculators dumped domestic currency assets. Such capital flight might actually force an unnecessary devaluation if government measures to restore confidence proved insufficient.A more telling argument against floating rates is that they make the economy more vulnerable to shocks coming from the domestic money market. Figure 19-2 uses theDD-AA model to illustrate this point. The figure shows the effect on the economy of a rise in real domestic money demand (that is, a rise in the real balances people desire to hold at each level of the interest rate and income) under a floating exchange rate. Because a lower level of income is now needed (given E) for people to be content to hold the available real money supply, A A1 shifts leftward to AA2: Income falls from Y] to Y2 as thecurrency appreciates from E1 to E2. The rise in money demand works exactly like a fall in the money supply, and if it is permanent it will lead eventually to a fall in the home price level.Under a fixed exchange rate, however, the change in money demand does not affect the economy at all. To prevent the home currency from appreciating, the central bank buys foreign reserves with domestic money until the real money supply rises by an amount equal to the rise in real money demand. This intervention has the effect of keeping AA[ in its original position, preventing any change in output or the price level.A fixed exchange rate therefore automatically prevents instability in the domestic money market from affecting the economy. This is a powerful argument in favor of fixed rates if most of the shocks that buffet the economy come from the home money market (that is, if they result from shifts in AA). But as we saw in the previous section, fixing the exchange rate will worsen macroeconomic performance on average if output market shocks (that is, shocks involving shifts in DD) predominate.Injury to International Trade and InvestmentCritics of floating also charged that the inherent variability of floating exchange rates would injure international trade and investment. Fluctuating currencies make importers more uncertain about the prices they will have to pay for goods in the future and make exporters more uncertain about the prices they will receive. This uncertainty, it was claimed, would make it costlier to engage in international trade, and as a result trade volumes—and with them the gains countries realize through trade—would shrink. Similarly, greater uncertainty about the payoffs on investments might interfere with productive international capital flows.Supporters of floating countered that international traders could avoid exchange rate risk through transactions in the forward exchange market (see Chapter 13), which would grow in scope and efficiency in a floating-rate world. The skeptics replied that forward exchange markets would be expensive to use and that it was doubtful that forward transactions could be used to cover all exchange-rate risks.At a more general level, opponents of floating rates feared that the usefulness of each country's money as a guide to rational planning and calculation would be reduced. A currency becomes less useful as a unit of account if its purchasing power over imports becomes less predictable. Uncoordinated Economic PoliciesSome defenders of the Bretton Woods system thought that its rules had helped promote orderly international trade by outlawing the competitive currency depreciations that occurred during the Great Depression. With countries once again free to alter their exchange rates at will, they argued, history might repeat itself. Countries might again follow self-serving macroeconomic policies that hurt all countries and, in the end, helped none. In rebuttal, the pro-floaters replied that the Bretton Woods rules for exchange rate adjustment were cumbersome.In addition, the rules were inequitable because, in practice, it was deficit countries that came under pressure to adopt restrictive macroeconomic policies or devalue. Thefixed-rate system had "solved" the problem of international cooperation on monetary policy only by giving the United States a dominant position that it ultimately abused.The Illusion of Greater AutonomyA final line of criticism held that the policy autonomy promised by the advocates of floating rates was, in part, illusory. True, a floating rate could in theory shut out foreign inflation over the long haul and allow central banks to set their money supplies as they pleased. But, it was argued, the exchange rate is such an important macroeconomic variable that policymakers would find themselves unable to take domestic monetary policy measures without considering their effects on the exchange rate.Particularly important to this view was the role of the exchange rate in the domestic inflation process. A currency depreciation that raised import prices might induce workers to demand higher wages to maintain their customary standard of living. Higher wage settlements would then feed into final goods prices, fueling price level inflation and further wage hikes. In addition, currency depreciation would immediately raise the prices of imported goods used in the production of domestic output. Therefore, floating rates could be expected to quicken the pace at which the price level responded to increases in the money supply. While floating rates implied greater central bank control over the nominal money supply, M s, they did not necessarily imply correspondingly greater control over the policy instrument that affects employment and other real economic variables, the real money supply, M S IP. The response of domestic prices to exchange rate changes would be particularly rapid in economies where imports make up a large share of the domestic consumption basket: In such countries, currency changes have significant effects on the purchasing power of workers' wages.The skeptics also maintained that the insulating properties of a floating rate are very limited. They conceded that the exchange rate would adjust eventually to offset foreign price inflation due to excessive monetary growth. In a world of sticky prices, however, countries are nonetheless buffeted by foreign monetary developments, which affect real interest rates and real exchange rates in the short run. Further, there is no reason, even in theory, why one country's fiscal policies cannot have repercussions abroad.Critics of floating thus argued that its potential benefits had been oversold relative toits costs. Macroeconomic policymakers would continue to labor under the constraint of avoiding excessive exchange rate fluctuations. But by abandoning fixed rates, they would have forgone the benefits for world trade and investment of predictable currency values. CASE STUDYExchange Rate Experience Between the Oil Shocks, 1973-1980 Which group was right, the advocates of floating rates or the critics? In this Case Study and the next we survey the experience with floating exchange rates since 1973 in an attempt to answer this question. To avoid future disappointment, however, it is best to state up front that, as is often the case in economics, the data do not lead to a clear verdict. Although a number of predictions made by the critics of floating were borne out by subsequent events, it is also unclear whether a regime of fixed exchange rates would have survived the series of economic storms that has shaken the world economy since 1973. The First Oil Shock and Its Effects, I973-I975As the industrialized countries' exchange rates were allowed to float in March 1973, an official group representing all IMF members was preparing plans to restore world monetary order. Formed in the fall of 1972, this group, called the Committee of Twenty, had been assigned the job of designing a new system of fixed exchange rates free of the asymmetries of Bretton Woods. By the time the committee issued its final "Outline of Reform" in July 1974, however, an upheaval in the world petroleum market had made an early return to fixed exchange rates unthinkable.Energy Prices and the 1974-1975 Recession.In October 1973 war broke out between Israel and the Arab countries. To protest support of Israel by the United States and the Netherlands, Arab members of the Organization of Petroleum Exporting Countries (OPEC), an international cartel including most large oil producers, imposed an embargo on oil shipments to those two countries. Fearing more general disruptions in oil shipments, buyers bid up market oil prices as they tried to build precautionary inventories. Encouraged by these developments in the oil market, OPEC countries began raising the price they charged to their main customers, the large oil companies. By March 1974 the oil price had quadrupled from its prewar price of $3 per barrel to $ 12 per barrel.The massive increase in the price of oil raised the energy prices paid by consumers and the operating costs of energy-using firms and also fed into the prices of nonenergy petroleum products, such as plastics. To understand the impact of these price increases, think of them as a large tax on oil importers imposed by the oil producers of OPEC. The oil shock had the same macroeconomic effect as a simultaneous increase in consumer and business taxes: Consumption and investment slowed down everywhere, and the world economy was thrown into recession. The current account balances of oil-importing countries worsened.The Acceleration of Inflation. The model we developed in Chapters 13 through 17 predicts that inflation tends to rise in booms and fall in recessions. As the world went into deep recession in 1974, however, inflation accelerated in most countries. Table 19-1 shows how inflation in the seven largest industrial countries spurted upward in that year. In a number of these countries inflation rates came close to doubling even though unemployment was rising.What happened? An important contributing factor was the oil shock itself: By directly raising the prices of petroleum products and the costs of energy-using industries, the increase in the oil price caused price levels to jump upward. Further, the worldwide inflationary pressures that had built up since the end of the 1960s had become entrenched in the wage-setting process and were continuing to contribute to inflation in spite of the deteriorating employment picture. The same inflationary expectations that were driving new wage contracts were also putting additional upward pressure on commodity prices as speculators built up stocks of commodities whose prices they expected to rise.Finally, the oil crisis, as luck would have it, was not the only supply shock troubling the world economy at the time. From 1972 on, a coincidence of adverse supply disturbances pushed farm prices upward and thus contributed to the general inflation.。
《国际经济学》教师手册及课后习题答案(克鲁格曼,第六版)imch13
HAPTER 13EXCHANGE RATES AND THE FOREIGN EXCHANGE MARKET: AN ASSET APPROACHChapter OrganizationExchange Rates and International TransactionsDomestic and Foreign PricesExchange Rates and Relative PricesBox: A Tale of Two DollarsThe Foreign Exchange MarketThe ActorsCharacteristics of the MarketSpot Rates and Forward RatesForeign Exchange SwapsFutures and OptionsThe Demand for Foreign Currency AssetsAssets and Asset ReturnsRisk and LiquidityInterest RatesExchange Rates and Asset ReturnsA Simple RuleReturn, Risk, and Liquidity in the Foreign Exchange MarketEquilibrium in the Foreign Exchange MarketInterest Parity: The Basic Equilibrium ConditionHow Changes in the Current Exchange Rate Affect Expected ReturnsThe Equilibrium Exchange RateInterest Rates, Expectations, and EquilibriumThe Effect of Changing Interest Rates on the Current Exchange RateThe Effect of Changing Expectations on the Current Exchange RateBox: The Perils of Forecasting Exchange RatesSummaryAppendix: Forward Exchange Rates and Covered Interest ParityCHAPTER OVERVIEWThe purpose of this chapter is to show the importance of the exchange rate in translating foreign prices into domestic values as well as to begin the presentation of exchange-rate determination. Central to the treatment of exchange-rate determination is the insight that exchange rates are determined in the same way as other asset prices. The chapter begins by describing how the relative prices of different countries' goods are affected by exchange rate changes. This discussion illustrates the central importance of exchange rates for cross-border economic linkages. The determination of the level of the exchange rate is modeled in the context of the exchange rate's role as the relative price of foreign and domestic currencies, using the uncovered interest parity relationship.The euro is used often in examples. Some students may not be familiar with the currency or aware of which countries use it; a brief discussion may be warranted. A full treatment of EMU and the theories surrounding currency unification appears in Chapter 20.The description of the foreign-exchange market stresses the involvement of large organizations (commercial banks, corporations, nonbank financial institutions, and central banks) and the highly integrated nature of the market. The nature of the foreign-exchange market ensures that arbitrage occurs quickly, so that common rates are offered worldwide. Forward foreign-exchange trading, foreign-exchange futures contracts and foreign-exchange options play an important part in currency market activity. The use of these financial instruments to eliminate short-run exchange-rate risk is described.The explanation of exchange-rate determination in this chapter emphasizes the modern view that exchange rates move to equilibrate asset markets. The foreign-exchange demand and supply curves that introduce exchange-rate determination in most undergraduate texts are not found here. Instead, there is a discussion of asset pricing and the determination of expected rates of return on assets denominated in different currencies.Students may already be familiar with the distinction between real and nominal returns. The text demonstrates that nominal returns are sufficient for comparing the attractiveness of different assets. There is a brief description of the role played by risk and liquidity in asset demand, but these considerations are not pursued in this chapter. (The role of risk is taken up again in Chapter 17.)Substantial space is devoted to the topic of comparing expected returns on assets denominated in domestic and foreign currency. The text identifies two parts of the expected return on a foreign-currency asset (measured in domestic-currency terms): the interest payment and the change in the value of the foreign currency relative to the domestic currency over the period in which the asset is held. The expected return on a foreign asset is calculated as a function of the current exchange rate for given expected values of the future exchange rate and the foreign interest rate.The absence of risk and liquidity considerations implies that the expected returns on all assets traded in the foreign-exchange market must be equal. It is thus a short step from calculations of expected returns on foreign assets to the interest parity condition. The foreign-exchange market is shown to be in equilibrium only when the interest parity condition holds. Thus, for given interest rates and given expectations about future exchange rates, interest parity determines the current equilibrium exchange rate. The interest parity diagram introduced here is instrumental in later chapters in which a more general model is presented. Since a command of this interest parity diagram is an important building block for future work, we recommend drills that employ this diagram.The result that a dollar appreciation makes foreign currency assets more attractive may appear counterintuitive to students -- why does a stronger dollar reduce the expected return on dollar assets? The key to explaining this point is that, under the static expectations and constant interest rates assumptions, a dollar appreciation today implies a greater future dollar depreciation; so, an American investor can expect to gain not only the foreign interest payment but also the extra return due to the dollar's additional future depreciation. The following diagram illustrates this point. In this diagram, the exchange rate at time t+1 is expected to be equal to E. If the exchange rate at time t is also E then expected depreciation is 0. If, however, the exchange rate depreciates at time t to E' then it must appreciate to reach E at time t+1. If the exchange rate appreciates today to E" then it must depreciate to reach E at time t+1. Thus, under static expectations, a depreciation today implies an expected appreciation and conversely.D om estic C urrencyF oreign C urrency E 'EE "Figure 13-1This pedagogic tool can be employed to provide some further intuition behind the interest parity relationship. Suppose that the domestic and foreign interest rates are equal. Interest parity then requires that expected depreciation is equal to zero and that the exchange rate today and next period is equal to E. If the domestic interest rate rises, people will want to hold more domestic-currency deposits. The resulting increased demand for domestic currency drives up the price of domestic currency, causing the exchange rate to appreciate. How long will this continue? The answer is that the appreciation of the domestic currency continues until the expected depreciation that is a consequence of the domestic currency's appreciation today just offsets the interest differential.The text presents exercises on the effects of changes in interest rates and of changes in expectations of the future exchange rate. These exercises can help develop students' intuition. For example, the initial result of a rise in U.S. interest rates is a higher demand for dollar-denominated assets and thus an increase in the price of the dollar. This dollar appreciation is large enough that the subsequent expected dollar depreciation just equalizes the expected return on foreign-currency assets (measured in dollar terms) and the higher dollar interest rate.The appendix describes the covered interest parity relationship and applies it to explain the determination of forward rates under risk neutrality as well as the high correlation between movements in spot and forward rates.ANSWERS TO TEXTBOOK PROBLEMS1. At an exchange rate of $1.50 per euro, the price of a bratwurst in terms of hot dogs is 3hot dogs per bratwurst. After a dollar appreciation to $1.25 per euro, the relative price of a bratwurst falls to 2.5 hot dogs per bratwurst.2. The Norwegian krone/Swiss franc cross rate must be 6 Norwegian krone per Swissfranc.3. The dollar rates of return are as follows:a. ($250,000 - $200,000)/$200,000 = 0.25.b. ($216 - $180)/$180 = 0.20.c. There are two parts of this return. One is the loss involved due to the appreciation ofthe dollar; the dollar appreciation is ($1.38 - $1.50)/$1.50 = -0.08. The other part of the return is the interest paid by the London bank on the deposit, 10 percent. (The size of the deposit is immaterial to the calculation of the rate of return.) In terms of dollars, the realized return on the London deposit is thus 2 percent per year.4. Note here that the ordering of the returns of the three assets is the same whether wecalculate real or nominal returns.a. The real return on the house would be 25% - 10% = 15%. This return could also becalculated by first finding the portion of the $50,000 nominal increase in the house's price due to inflation ($20,000), then finding the portion of the nominal increase due to real appreciation ($30,000), and finally finding the appropriate real rate of return ($30,000/$200,000 = 0.15).b. Again, subtracting the inflation rate from the nominal return we get 20%- 10% = 10%.c. 2% - 10% = -8%.5. The current equilibrium exchange rate must equal its expected future level since, withequality of nominal interest rates, there can be no expected increase or decrease in the dollar/pound exchange rate in equilibrium. If the expected exchange rate remains at $1.52 per pound and the pound interest rate rises to 10 percent, then interest parity is satisfied only if the current exchange rate changes such that there is an expected appreciation of the dollar equal to 5 percent. This will occur when the exchange rate rises to $1.60 per pound (a depreciation of the dollar against the pound).6. If market traders learn that the dollar interest rate will soon fall, they also reviseupward their expectation of the dollar's future depreciation in the foreign-exchange market. Given the current exchange rate and interest rates, there is thus a rise in the expected dollar return on euro deposits. The downward-sloping curve in the diagram below shifts to the right and there is an immediate dollar depreciation, as shown in the figure below where a shift in the interest-parity curve from II to I'I' leads to a depreciation of the dollar from E 0 to E 1.E($/euro i E 0 E 1Figure 13-2 7. The analysis will be parallel to that in the text. As shown in the accompanyingdiagrams, a movement down the vertical axis in the new graph, however, is interpreted as a euro appreciation and dollar depreciation rather than the reverse. Also, the horizontal axis now measures the euro interest rate. Figure 13-3 demonstrates that, given the expected future exchange rate, a rise in the euro interest rate from R 0 to R 1 will lead to a euro appreciation from E 0 to E 1.Figure 13-4 shows that, given the euro interest rate of i, the expectation of a stronger euro in the future leads to a leftward shift of the downward-sloping curve from II to I'I' and a euro appreciation (dollar depreciation) from E to E'. A rise in the dollar interest rate causes the same curve to shift rightward, so the euro depreciates against the dollar. This simply reverses the movement in figure 13-4, with a shift from I'I' to II, and a depreciation of the euro from E' to E. All of these results are the same as in the text when using the diagram for the dollar rather than the euro.EE 0rates o f return (in euro s) (euroE 101Figure 13-3Ei E (euro/$)E ’Figure 13-48. a. If the Federal Reserve pushed interest rates down, with an unchanged expected futureexchange rate, the dollar would depreciate (note that the article uses the term "downward pressure" to mean pressure for the dollar to depreciate). In terms of the analysis developed in this chapter, a move by the Federal Reserve to lower interest rates would be reflected in a movement from R to R' in figure 13.5, and a depreciation of the exchange rate from E to E'.If there is a "soft landing", and the Federal Reserve does not lower interest rates, thenthis dollar depreciation will not occur. Even if the Federal Reserve does lower interest rates a little, say from R to R", this may be a smaller decrease then what peopleinitially believed would occur. In this case, the expected future value of the exchange rate will be more appreciated than before, causing the interest-parity curve to shift in from II to I'I' (as shown in figure 13.6). The shift in the curve reflects the "optimism sparked by the expectation of a soft landing" and this change in expectations means that, with a fall in interest rates from R to R", the exchange rate depreciates from E to E", rather than from E to E *, which would occur in the absence of a change in expectations.ER ’ EE*Rrates of return (in dollars)EE Rrates of return (in dollars) E ”E *R ”Figure 13-6b.The "disruptive" effects of a recession make dollar holdings more risky. Risky assetsmust offer some extra compensation such that people willingly hold them as opposed to other, less risky assets. This extra compensation may be in the form of a bigger expected appreciation of the currency in which the asset is held. Given the expected future value of the exchange rate, a bigger expected appreciation is obtained by a more depreciated exchange rate today. Thus, a recession that is disruptive and makes dollar assets more risky will cause a depreciation of the dollar.9. The euro is less risky for you. When the rest of your wealth falls, the euro tends toappreciate, cushioning your losses by giving you a relatively high payoff in terms of dollars. Losses on your euro assets, on the other hand, tend to occur when they are least painful, that is, when the rest of your wealth is unexpectedly high. Holding the euro therefore reduces the variability of your total wealth.10. The chapter states that most foreign-exchange transactions between banks (whichaccounts for the vast majority of foreign-exchange transactions) involve exchanges of foreign currencies for U.S. dollars, even when the ultimate transaction involves the sale of one nondollar currency for another nondollar currency. This central role of the dollar makes it a vehicle currency in international transactions. The reason the dollar serves as a vehicle currency is that it is the most liquid of currencies since it is easy to find people willing to trade foreign currencies for dollars. The greater liquidity of the dollar as compared to, say, the Mexican peso, means that people are more willing to hold the dollar than the peso, and thus, dollar deposits can offer a lower interest rate, for any expected rate of depreciation against a third currency, than peso deposits for the same rate of depreciation against that third currency. As the world capital market becomes increasingly integrated, the liquidity advantages of holding dollar deposits as opposed to yen deposits will probably diminish. The euro represents an economy as large as the United States, so it is possible that it will assume some of that vehicle role of the dollar, reducing the liquidity advantages to as far as zero. Since the euro has no history as a currency, though, some investors may be leary of holding it until it has established a track record. Thus, the advantage may fade slowly.11. Greater fluctuations in the dollar interest rate lead directly to greater fluctuations in theexchange rate using the model described here. The movements in the interest rate can be investigated by shifting the vertical interest rate curve. As shown in figure 13.7,these movements lead directly to movements in the exchange rate. For example, an increase in the interest rate from i to i' leads to a dollar appreciation from E to E'. A decrease in the interest rate from i to i" leads to a dollar depreciation from E to E". This diagram demonstrates the direct link between interest rate volatility and exchange rate volatility, given that the expected future exchange rate does not change.EE($/foreign currency)rates of return (in dollars)iE ’i"i'E ”Figure 13-712. A tax on interest earnings and capital gains leaves the interest parity condition thesame, since all its components are multiplied by one less the tax rate to obtain after-tax returns. If capital gains are untaxed, the expected depreciation term in the interest parity condition must be divided by 1 less the tax rate. The component of the foreign return due to capital gains is now valued more highly than interest payments because it is untaxed.13. The forward premium can be calculated as described in the appendix. In this case, wefind the forward premium on euro to be (1.26 – 1.20)/1.20 = 0.05. The interest-rate difference between one-year dollar deposits and one-year euro deposits will be 5 percent because the interest difference must equal the forward premium on euro against dollars when covered interest parity holds.FURTHER READINGSJ. Orlin Grabbe. International Financial Markets, 3rd Edition. Englewood Cliffs: Prentice-Hall, 1996.Philipp Hartmann. Currency Competition and Foreign Exchange Rate Markets: The Dollar, the Yen, and the Euro. Cambridge: Cambridge University Press, 1999.John Maynard Keynes. A Tract on Monetary Reform. Chapter 3. London: Macmillan, 1923.Paul R. Krugman. "The International Role of the Dollar: Theory and Prospect." in John F.O. Bilson and Richard C. Marston, eds. Exchange Rate Theory and Practice. Chicago: University of Chicago Press, 1984, pp. 261-278.Richard Levich. International Financial Markets: Prices and Policies. Boston: Irwin McGraw-Hill, 1998.Richard K. Lyons. The Microstructure Approach to Exchange Rates. Cambridge: MIT Press, 2001.Ronald I. McKinnon. Money in International Exchange: The Convertible Currency System. New York: Oxford University Press, 1979.Michael Mussa. "Empirical Regularities in the Behavior of Exchange-rates and Theories of the Foreign-Exchange Market." in Karl Brunner and Allan H. Meltzer eds., Policies for Employment Prices and Exchange-Rates. Carnegie-Rochester Conference Series on Public Policy 11. Amsterdam: North-Holland Press, 1979.Julian Walmsley. The Foreign Exchange and Money Markets Guide. New York: John Wiley & Sons, 1992.99。
国际经济学克鲁格曼版[]PPT课件
![国际经济学克鲁格曼版[]PPT课件](https://img.taocdn.com/s3/m/90382b676c175f0e7dd1372e.png)
的需求量总和之比。
• 当奶酪的相对价格上升时，各国的消费者将会减少奶 酪的购买量，增加葡萄酒的购买量，因此奶酪的相对 需求就减少了。
可编辑
3-30
Hale Waihona Puke 相对供给和相对需求奶酪的相对价格， PC/PW
a*LC/a*LW aLC/aLW
可编辑
3-9
比较优势和贸易
万支玫瑰 万台计算机
美国
-1000
+10
厄瓜多尔
+1000
-3
总计
0
+7
可编辑
3-10
比较优势和贸易
• 在这个简单的例子中，我们可以看出当每个国 家专注于生产他们有比较优势的产品时，两个 国家就可以生产和消费更多的商品和服务。
可编辑
3-11
单一要素的李嘉图模型
• 玫瑰和计算机的简单案例解释了李嘉图模型的 内涵。
• 若相对需求曲线是RD’，则表示奶酪的相对价格等于 本国奶酪的机会成本。此时，本国不一定需要从事任 何一种产品的专业化生产。外国仍然专业生产葡萄酒。
• 一般来说，是第一种情况居多。各国都只生产自己具 有比较优势的产品。再进行贸易，使得消费扩张。
可编辑
3-33
贸易所得
• 行业间相对劳动生产率不同的国家会在不同的产品生 产中进行专业化分工，而每个国家的贸易所得正是通 过这种专业化分工而获得的。此外，国家可以用贸易 所得来购买所需的商品和服务。
RS 1
RD
L/aLC L*/a*LW
奶酪的相对产量，
QC + Q*C QW + Q*W
国际经济学课件中文版克鲁格曼教材
18
比较优势的概念
表 2-1的例子说明了比较优势的原则:
• 如果每一个国家出口 他具有 比较优势（低机会成本）
的产品 ，那么所有国家都能从以这种原则进行的贸易 中获益。
什么决定 比较优势?
• 回答这个问题将会帮助我们理解国家之间的 不同是如
何决定贸易结构（一个国家出口哪种商品）的。
– 国际贸易也许会损害国内某些人的利益 – 贸易, 技术, 以及高工资和低劳动技能的工人.
• 国际贸易关于什么的学科?
– 贸易结构 (谁卖给谁什么?) – 气候以及资源决定了一些产品的贸易结构 – 在工业和服务业在贸易结构上差异更加微妙. -不同国家劳动生产率是不同的. -一方面是国家资源如资本，劳动，土地的相关供给另一方面是在不同商 品的生产上对于这些劳动要素的运用. -一个大体上随机的组成部分. – 贸易的两种方式: » 产业内贸易 取决于国家之间的不同. » 产业间贸易 取决于市场的规模并且发生在相似国家之间
• 国际市场允 许政府对不同公司实行区别对待的政策，
这是可以分析的.
• 政府也控制货币供应.
在国际经济学的学习期间还会学到其他一些经常发
生的经济问题.
Copyright © 2003 Pearson Education, Inc.
Slide 1-3
国际经济学是关于什么的学科？
贸易利益
• 很对人对于一国进口其自己可以生产的物品持怀疑的态度. • 当国家卖给其他国家货物和服务时，所有国家都受益. • 贸易与受益分配
27
单一要素世界的贸易
绝对优势
• 如果一个国家在某种商品上生产较外国需要更少的
单位劳动力，那么这个国家就在这种商品的生产上 具有绝对的比较优势.
《国际经济学》克鲁格曼(第六版)习题答案imsect4
OVERVIEW OF SECTION IV: INTERNATIONAL MACROECONOMIC POLICYPart IV of the text is comprised of five chapters:Chapter 18 The International Monetary System, 1870-1973Chapter 19 Macroeconomic Policy and Coordination Under Floating Exchange Rates Chapter 20 Optimum Currency Areas and The European ExperienceChapter 21 The Global Capital Market: Performance and Policy ProblemsChapter 22 Developing Countries: Growth, Crisis, and ReformSECTION OVERVIEWThis final section of the book, which discusses international macroeconomic policy, provides historical and institutional background to complement the theoretical presentation of the previous section. These chapters also provide an opportunity for students to hone their analytic skills and intuition by applying and extending the models learned in Part III to a range of current and historical issues.The first two chapters of this section discuss various international monetary arrangements. These chapters describe the workings of different exchange rate systems through the central theme of internal and external balance. The model developed in the previous section provides a general framework for analysis of gold standard, reserve currency, managed floating, and floating exchange-rate systems.Chapter 18 chronicles the evolution of the international monetary system from the gold standard of 1870 - 1914, through the interwar years, and up to and including the post-war Bretton Woods period. The chapter discusses the price-specie-flow mechanism of adjustment in the context of the discussion of the gold standard. Conditions for internal and external balance are presented through diagrammatic analysis based upon the short-run macroeconomic model of Chapter 16. This analysis illustrates the strengths and weaknesses of alternative fixed exchange rate arrangements. The chapter also draws upon earlier discussion of balance of payments crises to make clear the interplay between "fundamental disequilibrium" and speculative attacks. There is a detailed analysis of the Bretton Woodssystem that includes a case study of the experience during its decline beginning in the mid-1960s and culminating with its collapse in 1973.Chapter 19 focuses on recent experience under floating exchange rates. The discussion is couched in terms of current debate concerning the advantages of floating versus fixed exchange rate systems. The theoretical arguments for and against floating exchange rates frame two case studies, the first on the experience between the two oil shocks in the 1970s and the second on the experience since 1980. The transmission of monetary and fiscal shocks from one country to another is also considered. Discussion of the experience in the 1980s points out the shift in policy toward greater coordination in the second half of the decade. Discussion of the 1990s focuses on the strong U.S. economy from 1992 on and the extended economic difficulties in Japan. Finally, the chapter considers what has been learned about floating rates since 1973. The appendix illustrates losses arising from uncoordinated international monetary policy using a game theory setup.Europe’s switch to a single currency, the euro, is the subject of Chapter 20, and provides a particular example of a single currency system. The chapter discusses the history of the European Monetary System and its precursors. The early years of the E.M.S. were marked by capital controls and frequent realignments. By the end of the 1980s, however, there was marked inflation convergence among E.M.S. members, few realignments and the removal of capital controls. Despite a speculative crisis in 1992-3, leaders pressed on with plans for the establishment of a single European currency as outlined in the Maastricht Treaty which created Economic and Monetary Union (EMU). The single currency was viewed as an important part of the EC 1992 initiative which called for the free flow within Europe of labor, capital, goods and services. The single currency, the euro, was launched on January 1, 1999 with eleven original participants. These countries have ceded monetary authority to a supranational central bank and constrained their fiscal policy with agreements on convergence criteria and the stability and growth pact. A single currency imposes costs as well as confers benefits. The theory of optimum currency areas suggests conditions which affect the relative benefits of a single currency. The chapter provides a way to frame this analysis using the GG-LL diagram which compares the gains and losses from a single currency. Finally, the chapter examines the prospects of the EU as an optimal currency area compared to the United States and considers the future challenges EMU will face.The international capital market is the subject of Chapter 21. This chapter draws an analogy between the gains from trade arising from international portfolio diversification andinternational goods trade. There is discussion of institutional structures that have arisen to exploit these gains. The chapter discusses the Eurocurrency market, the regulation of offshore banking, and the role of international financial supervisory cooperation. The chapter examines policy issues of financial markets, the policy trilemma of the incompatibility of fixed rates, independent monetary policy, and capital mobility as well as the tension between supporting financial stability and creating a moral hazard when a government intervenes in financial markets. The chapter also considers evidence of how well the international capital market has performed by focusing on issues such as the efficiency of the foreign exchange market and the existence of excess volatility of exchange rates.Chapter 22 discusses issues facing developing countries. The chapter begins by identifying characteristics of the economies of developing countries, characteristics that include undeveloped financial markets, pervasive government involvement, and a dependence on commodity exports. The macroeconomic analysis of previous chapters again provides a framework for analyzing relevant issues, such as inflation in or capital flows to developing countries. Borrowing by developing countries is discussed as an attempt to exploit gains from intertemporal trade and is put in historical perspective. Latin American countries’ problems with inflation and subsequent attempts at reform are detailed. Finally, the East Asian economic miracle is revisited (it is discussed in Chapter 10), and the East Asian financial crisis is examined. This final topic provides an opportunity to discuss possible reforms of the world’s financial architecture.。
复旦大学【克鲁格曼《国际经济学》第六版英文课件】CH12
– It is the sum of domestic and foreign expenditure on the goods and services produced by domestic factors of production:
Y = C + I + G + EX – IM
(12-1)
4
The National Income Accounts
Gross national product (GNP)
– The value of all final goods and services produced by a country’s factors of production and sold on the market in a given time period
The price of milk is 0.5 bushel of wheat per gallon, and at this price Agrarians want to consume 40 gallons of milk.
13
National Income Accounting for an Open Economy
– Adjustments to the definition of GNP:
»Depreciation of capital
It reduces the income of capsubtracted from GNP (to get the net national product).
»CA balance is goods production less domestic demand. »CA balance is the excess supply of domestic financing.
国际经济学 克鲁格曼版
世界贸易概览
Slides prepared by Thomas Bishop
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
本章探讨的两个问题
• 谁和谁贸易的问题（引力模型不仅能解释两国 间贸易量的大小，而且能说明当今制约国际贸 易发展的障碍因素）
2-20
世界变小了吗？
• 两个经济全球化浪潮
1840—1914 经济依赖于蒸汽机、铁路、电 报机、电话 。经济全球化因为战争和经济大 萧条被阻止和取消。 1945至今: 经济依赖于电话、飞机、计算机、 因特网、光学纤维、掌上电脑、GPS卫星定 位等等。
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
轮船、帆船、指南针、铁路、电报、蒸汽机、动力 机、汽车、电话、飞机、计算机、机械装置、因特 网、光纤化学、个人数码助理,、GPS卫星定位等等 现代化技术增加了国际贸易量。
• 但是历史表明政治因素，例如战争，对贸易形 式的影响要比交通和通讯的改革更为强烈。
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
2-15
距离、壁垒和疆界
• 1994年美国和加拿大、墨西哥签署了贸 易协定，即《北美自由贸易协定》。
• 由于加拿大和墨西哥不仅是美国的邻居， 而且与它签署了贸易协定，因此美国的 邻国与美国个贸易量远胜过美国的欧洲 贸易伙伴与美国的贸易量。
国际经济学课件ch19
19-3
Arguments for Flexible Exchange Rates
1. Monetary policy autonomy
♦ Without a need to trade currency in foreign exchange markets, central banks are more free to influence the domestic money supply, interest rates, and inflation. ♦ Central banks can more freely react to changes in aggregate demand, output, and prices in order to achieve internal balance.
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
19-10
Arguments Against Flexible Exchange Rates
1. Uncoordinated macroeconomic policies
♦ Flexible exchange rates lose the coordination of monetary polices through fixed exchange rates. a) Lack of coordination may cause “expenditure switching” policies: each country may want to maintain a low-valued currency, so that aggregate demand is switched to domestic products at the expense of other economies
复旦大学【克鲁格曼《国际经济学》第六版英文课件】CH10
• Protecting manufacturing does no good unless the
protection itself helps make industry competitive.
– Example: Pakistan and India have protected their heavy manufacturing sectors for decades and have recently begun to develop significant exports of light manufactures like textiles.
Copyright © 2003 Pearson Education, Inc.
Slide 10-12
Import-Substituting Industrialization
• Why didn’t import-substituting industrialization work
the way it was supposed to?
Copyright © 2003 Pearson Education, Inc.
Slide 10-8
Import-Substituting Industrialization
▪ Promoting Manufacturing Through Protection
• Import-substituting industrialization
economic development?
– Many economists are now harshly critical of the results of import substitution, arguing that it has fostered highcost, inefficient production.
(克鲁格曼)英文课件国际经济学CH06
– Marginal Cost (MC) is the amount it costs the firm to produce one extra unit.
Copyright © 2003 Pearson Education, Inc.
Slide 6-12
5.The Theory of Imperfect Competition
▪ Monopoly: A Brief Review
• Marginal revenue
– The extra revenue the firm gains from selling an additional unit
– Its curve, MR, always lies below the demand curve, D.
• Increasing the amount of all inputs used in the
production of any commodity will increase output of that commodity in the same proportion.
▪ In practice, many industries are characterized by
Table 6-1: Relationship of Input to Output for a Hypothetical Industry
Copyright © 2003 Pearson Education, Inc.
Slide 6-6
3.Economies of Scale and Market Structure
Slide 6-3
2.Economies of Scale and
保罗克鲁格曼国际经济学英文课件1-7章
保罗克鲁格曼国际经济学英⽂课件1-7章Preface§1. Some distinctive features of International Economics: Theory and Policy.This book emphasizes several of the newer topics that previous authors failed to treat in a systematic way:·Asset market approach to exchange rate determination.·Increasing returns and market structure.·Politics and theory of trade policy.·International macroeconomic policy coordination·The word capital market and developing countries.·International factor movements.§2. Learning features:·Case studies·Special boxes·Captioned diagrams·Summary and key terms·Problems·Further reading§3.Reference books:·[美]保罗?克鲁格曼，茅瑞斯?奥伯斯法尔德，《国际经济学》，第6版，中译本，中国⼈民⼤学出版社，2007.·李坤望主编，《国际经济学》，第⼆版，⾼等教育出版社，2005.·Dominick Salvatore, International Economics, Prentice Hall International，第9版，清华⼤学出版社，英⽂版，2008. Chapter 1Introduction·Nations are more closely linked through trade in goods and services, through flows of money, and through investment than ever before.§1. What is international economics about?Seven themes recur throughout the study of international economics:·The gains from trade(National welfare and income distribution)·The pattern of trade·Protectionism·The balance of payments·Exchange rate determination·International capital market§2. International economics: trade and money·Part I (chapters 2 through 7) :international trade theory·Part II (chapters 8 through 11) : international trade policy ·Part III (chapters 12 through 17) : international monetary theory ·Part IV (chapters 18 through 22) : international monetary policyChapter 2 World Trade: An Overview§1 Who Trades with Whom?1. Size Matters: The Gravity ModelThe size of an economy is directly related to the volume of imports and exports.Larger economies produce more goods and services, so they have more to sell in the export market. Larger economies generate more income from the goods and services sold, so people are able to buy more imports.3 of the top 10 trading partners with the US in 2003 were also the 3 largest European economies: Germany, UK and France. These countries have the largest gross domestic product (GDP) in Europe.Cultural affinity: if two countries have cultural ties, it is likely that they also have strong economic ties.Geography: ocean harbors and a lack of mountain barriers make transportation and tradeeasier.2. Distance Matters: The Gravity ModelDistance between markets influences transportation costs and therefore the cost of imports and exports. Distance may also influence personal contact and communication, which may influence trade.Estimates of the effect of distance from the gravity model predict that a 1% increase in the distance between countries isassociated with a decrease in the volume of trade of 0.7% to 1%.Borders: crossing borders involves formalities that take time and perhaps monetary costs like tariffs. These implicit and explicit costs reduce trade. The existence of borders may also indicate the existence of different languages or different currencies, either of which may impede trade more.3.The gravity modelThe gravity model is:a b c ij i j ijT A Y Y D =?? where a, b, and c are allowed to differ from 1.§2. The Changing Composition of Trade1. Has the World Become “Smaller ”?There were two waves of globalization.1840–1914: economies relied on steam power, railroads, telegraph, telephones. Globalization was interrupted and reversed by wars and depression.1945–present: economies rely on telephones, airplanes, computers, internet, fiber optics,…2. Changing Composition of TradeToday, most of the volume of trade is in manufactured products such as automobiles, computers, clothing and machinery. Services such as shipping, insurance, legal fees and spending by tourists account for 20% of the volume of trade.Mineral products (e.g., petroleum, coal, copper) and agricultural products are a relatively small part of trade.Multinational Corporations and OutsourcingBefore 1945, multinational corporations played a small role world trade.But today about one third of all US exports and 42% of all US imports are sales from one division of a multinational corporation to another.Chapter 3Labor Productivity and Comparative Advantage:The Ricardian Model*Countries engage in international trade for two basic reasons:·Comparative advantage: countries are different in technology (chapter 3) or resource (chapter 4).·Economics of scale (chapter 6).*All motives are at work in the real world but only one motive is present in each trade model.§1. The concept of comparative advantage1. Opportunity cost : The opportunity cost of roses in terms of computers is the number of computers that could have been produced with the resources used to produce a given number of roses.Table 3-1 Hypothetical Changes in Production Million Roses Thousand Computers United States－10 ＋100 South America＋10 －30 Total 0 ＋702. Comparative advantage : A country has a comparative advantage in producing a good if the opportunity cost of producing that good in terms of other goods is lower in that country than it is in other countries.·Denoted by opportunity cost.·A relative concept : relative labor productivity or relative abundance.3. The pattern of trade: Trade between two countries can benefit both countries if each country exports the goods in which it has a comparative advantage.§2. A one-factor economy1.production possibilities: LC C LW W a Q a Q L +≤Figure 3-1 Home’s Production Possibility Frontier2. Relative price and supply·Labor will move to the sector which pays higher wage.·If C W LC LW P P a a >(C LC W LW P a P a >, wage in the cheese sector is higher ), the economy will specialize in the production of cheese.·In a closed economy, C W LC LW P P a a =.·If each country has absolute advantage in one good respectively, will there exist comparative advantage?§3. Trade in a one-factor world·Model : 2×1×2·Assume: **LC LW LC LW a a a a <Home has a comparative advantage in cheese.Home ’s relative productivity in cheese is higher.Home ’s pretrade relative price of cheese is lower than foreign.·The condition under which home has the comparative advantage involves all four unit labor requirement, not just two.1. Determining the relative price after trade·Relative price is more important than absolute price, when people make decisions on production and consumption.·General equilibrium analysis: RS equals RD . (World general equilibrium)·RS : a “step ” with flat sections linked by a vertical section. **(/)(/)LC LW L a L aFigure 3-3 World Relative Supply and Demand·RD : subsititution effects·Relative price after trade: between the two countries ’ pretrade price.(How will the size of the trading countries affect the relative price after trade? Which country ’s living condition improves more? Is it possible that a country produce both goods?)2. The gains from tradeThe mutual gain can be demonstrated in two alternative ways.·To think of trade as an indirect method of production :(1/)()1/LC C W LW a P P a > or C W LC LW P P a a >·To examine how trade affects each country ’s possibilities of consumption.Figure 3-4 Trade Expands Consumption Possibilities(How will the terms of trade change in the long-term? Are there income distribution effects within countries? )3. A numerical example:·Two crucial points :When two countries specialize in producing the goods in which they have a comparative advantage, both countries gain from trade.Comparative advantage must not be confused with absolute advantage; it is comparative, not absolute, advantage that determines who will and should produce a good.Table 3-2 Unit Labor Requirements Cheese WineHome 1LC a = hour per pound 2LW a = hours per gallonForeign*6LC a = hours per pound *3LW a = hours per gallon absolute advantage; relative price; specialization; the gains from trade.4. Relative wages·It is precisely because the relative wage is between the relative productivities that each country ends up with a cost advantage in one good.***LC LC LW LW a a w w a a >> **LC LC wa w a <；**LW LW wa w a >·Relative wages depend on relative productivity and relative demand on goods.Special box: Do wages reflect productivity?。
《国际经济学》教师手册及课后习题答案(克鲁格曼,第六版)imch10
HAPTER 10TRADE POLICY IN DEVELOPING COUNTRIESChapter OrganizationImport-Substituting IndustrializationThe Infant Industry ArgumentPromoting Manufacturing Through ProtectionismCase Study: The End of Import Substitution in ChileResults of Favoring Manufacturing: Problems of Import-Substituting Industrialization Problems of the Dual EconomyThe Symptoms of DualismCase Study: Economic Dualism in IndiaDual Labor Markets and Trade PolicyTrade Policy as a Cause of Economic DualismExport-Oriented Industrialization: The East Asian MiracleThe Facts of Asian GrowthTrade Policy in the HPAEsIndustrial Policy in the HPAEsBox: China’s BoomOther Factors in GrowthSummaryCHAPTER OVERVIEWThe final two chapters on international trade, Chapters 10 and 11, discuss trade policy considerations in the context of specific issues. Chapter 10 focuses on the use of trade policy in developing countries and Chapter 11 focuses on new controversies in trade policy.While there is great diversity among the developing countries, they share some common policy concerns. These include the development of domestic manufacturing industries, the uneven degree of development within the country, and the desire to foster economic growth and improve livingstandards. This chapter discusses both the successful and unsuccessful trade policy strategies which have been applied by developing countries in attempts to address these concerns.Many developing countries pose the creation of a significant manufacturing sector as a key goal of economic development. One commonly voiced argument for protecting manufacturing industries is the infant industry argument, which states that developing countries have a potential comparative advantage in manufacturing and can realize that potential through an initial period of protection. This argument assumes market failure in the form of imperfect capital markets or the existence of externalities in production: such a market failure makes the social return to production higher than the private return. This implies that a firm will not be able to recapture rents or profits that are in line with the contribution to welfare made by the product or industry establishment of the firm. Without some government support, the argument goes, the amount of investment which will occur in this industry will be less than socially optimal levels.Given these arguments, many nations have attempted import substitution led industrialization. In the 1950s and 1960s the strategy was quite popular and did lead to a dramatic reduction in imports in some countries. The overall result, though, was not a success. The infant industry argument did not always hold, as protection could let young industries survive, but could not make them efficient. By the late 1980s, most countries had shifted away from the strategy, and the chapter includes a case study of Chile’s change from import substitution to a more open strategy.Development often proceeds unevenly and results in a dual economy consisting of a modern sector and a traditional sector. The modern sector typically differs from the traditional sector in that it has a higher value of output per worker, higher wages, higher capital intensity, lower returns to capital, and persistent unemployment. For example, in India less than one percent of the population is employed in the manufacturing sector but this sector produces 15 percent of GNP. Wages in Indian manufacturing are six times those in agriculture.Some argue that the existence of wage differentials in a dual economy demonstrate the failure of labor markets to work well. Society would benefit if workers moved from agriculture to manufacturing. A first best policy addresses the wage differential directly. Protectionism may be a second best solution, but one with the undesirable consequences of inducing both capital and labor into manufacturing. This raises the already too high capital intensity in the manufacturing sector. Further, an increase in the number of urban manufacturing jobs may exacerbate the problems of urban unemployment through migration from the countryside to the cities. This is a key theme of theHarris-Todaro model. Thus, it is possible that the medicine of trade policies worsens the illness of dualism.The East Asian “miracle” of the high-performing Asian economies (HPAEs) provides a striking and controversial example of export-oriented industrialization. While these countries encountered difficulties in the late 1990s (see Chapter 22), this chapter focuses on their spectacular growth from the 1960s to 1990s. It is acknowledged that the growth was extremely impressive; the controversy is over the source of the success in these countries. Some observers argue that although these countries do not practice free trade, they have lower rates of protection (and more outward orientation) than other developing countries. Other observers argue that the interventionist industrial policies pursued by the HPAEs have been the reason for success, and outward orientation is just a by-product of active rather than passive government involvement in industry. Still others argue that high rates of domestic savings and rapid improvements in education are behind the stunning growth performance.ANSWERS TO TEXTBOOK PROBLEMS1. The Japanese example gives pause to those who believe that protectionism is alwaysdisastrous. However, the fact of Japanese success does not demonstrate that protectionist trade policy was responsible for that success. Japan was an exceptional society that had emerged into the ranks of advanced nations before World War II, and was recovering from wartime devastation. It is arguable that economic success would have come anyway, so that the apparent success of protection represents a "pseudo-infant-industry" case of the kind discussed in the text.2. a. The initial high costs of production would justify infant industry protection if the costs to thesociety during the period of protection were less than the future stream of benefits from a mature, low cost industry.b. An individual firm does not have an incentive to bear development costs itself for an entireindustry when these benefits will accrue to other firms. There is a stronger case for infant industry protection in this instance because of the existence of market failure in the form of the appropriability of technology.3. There are larger markets in larger countries like Brazil and industries which benefit fromimport substituting policies could realize economy of scale advantages there which would not be available to industries producing solely for the market of Ghana.4. The value of the marginal product of labor in the production of food is 9 x $10 = $90.a. The wage will be equated in each sector when there are no distortions. This occurs whenthere are 8 workers in manufacturing and 12 in food production. The wage of all workers will be $90. The output of each sector can be found by calculating the area under the marginal product of labor curves. This curve is a horizontal line for food, so output in this sector is 12 x 9 = 108. Summing the area under the MPL curve for manufacturing up to 8 workers results in output of 110.b. Manufacturing output shrinks to 3 workers, and there are 17 workers in the food sector.Food output now equals 153 while manufacturing output equals 54. The cost of the distortion equals the value of output lost, which is $110.c. The probability of being employed is 1 - (n+3/n) = 3/n where n is the number of city workers.Workers will migrate to the city until the wage times the probability of being employed equals the wage offered in the rural area with certainty. There will be 5 workers in manufacturing,15 workers in agriculture, and 2 unemployed workers. The output of the manufacturingsector is 54 and for food is 135.5. Under these circumstances, workers are both "pulled" into the urban, "modern" sector by thelure of high wages and "pushed" from the rural areas due to stagnant conditions in the agricultural sector. To correct this problem of the bias toward the urban-manufacturing sector, explicit attention should be paid to making the agricultural sector more rewarding, In order to retain labor, the agricultural sector might be provided with wage subsidies so that the rural-urban wage gap is reduced. Policies can also be targeted at promoting light rural enterprise and agricultural investment which would increase wages through increasing worker productivity. In addition, development of the rural infrastructure and social services might increase the relative attractiveness of the countryside.6. Import quotas on capital-intensive goods and subsidies for the import of capital equipmentfoster the development of a capital intensive sector, and thus of a dual economy. If the capital-intensive sector pays high wages relative to the traditional sector, the result may be rural-urban migration and the emergence of persistent urban unemployment.FURTHER READINGSJagdish Bhagwati, ed.. The New International Economic Order. Cambridge: MIT Press, 1977.Jagdish Bhagwati and T.N. Srinivasan. "Trade Policy and Development," in Rudiger Dornbusch and Jacob A. Frenkel, eds.. International Economic Policy: Theory and Evidence. Baltimore: Johns Hopkins University Press, 1979, pp. 1-35.W.M. Corden. Trade Policy and Economic Welfare. Oxford: Clarendon Press, 1974.Anne O. Krueger, "Trade Policies in Developing Countries," in Ronald W. Jones and Peter B. Kenen, eds.. Handbook of International Economics. Vol. 1. Amsterdam: North-Holland, 1984. W. Arthur Lewis. The Theory of Economic Development. Homewood, Illinois: Irwin, 1955.I.M.D. Little. Economic Development. New York: Basic Books, 1982.I.M.D. Little, Tibor Scitovsky, and Maurice Scott. Industry and Trade in Some Developing Countries. New York: Oxford University Press, 1970.Dani Rodrik. "Imperfect Competition, Scale Economies and Trade Policies in Developing Countries", in Robert E. Baldwin, ed.. Trade Policy Issues and Empirical Analysis. Chicago: Univ. of Chicago Press, 1988.World Bank. The East Asian Miracle: Economic Growth and Public Policy. Oxford: Oxford University Press, 1993.World Bank. World Development Report 1991: The Challenge of Development. Washington, D.C.: World Bank, 1991.Alwyn Young. “A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore”, in O.J. Blanchard and S. Fischer, eds. NBER Macroeconomics Annual 1992.. Alwyn Young. “The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience,” Quarterly Journal of Economics 101 (August 1994) pp.641-80.。
ch18 The International Monetary System, 1870-1973 克鲁格曼国际经济学第六版英文教学课件
Copyright © 2003 Pearson Education, Inc.
Slide 18-8
Macroeconomic Policy Goals in an Open Economy
• Problems with Excessive Current Account
Surpluses:
– They imply lower investment in domestic plant and equipment.
• The U.S. Gold Standard Act of 1900 institutionalized
the dollar-gold link.
Copyright © 2003 Pearson Education, Inc.
Slide 18-11
International Macroeconomic Policy Under the Gold Standard, 1870-1914
Chapter 18 The International Monetary System, 1870-1973
Prepared by Iordanis Petsas To Accompany
International Economics: Theory and Policy, Sixth Edition by Paul R. Krugman and Maurice Obstfeld
Copyright © 2003 Pearson Education, Inc.
Slide 18-13
International Macroeconomic Policy Under the Gold Standard, 1870-1914
《国际经济学》克鲁格曼(第六版)习题答案imsect2
OVERVIEW OF SECTION II: INTERNATIONAL TRADE POLICYSection II of the text is comprised of four chapters:Chapter 8 The Instruments of Trade PolicyChapter 9 The Political Economy of Trade PolicyChapter 10 Trade Policy in Developing CountriesChapter 11 Strategic Trade Policies in Advanced CountriesSECTION II OVERVIEWTrade policy issues figure prominently in current political debates and public policy discussions. The first two chapters of this section of the text are concerned with the instruments of trade policy and the arguments for free trade and managed trade. The second two chapters consider these concepts in the context of specific sets of countries that face common problems. Throughout, the use of case studies provides the student with real world examples that clearly illustrate the theoretical arguments.Chapter 8 discusses various instruments of trade policy including tariffs, quotas, voluntary export restraints, and local content requirements. The effects of these policies on prices and trade volumes are determined in the context of a partial equilibrium framework. The chapter reviews the analytical tools of consumer and producer surplus, and uses these tools to consider the welfare effects of various protectionist measures. The specific incidents of trade restrictions presented as case studies include import quotas on sugar entering United States markets, voluntary export restraints on Japanese autos, and oil import quotas.Chapter 9 presents the set of ideas known as the political economy of trade theory. These ideas enable you to understand why certain trade restrictions exist, despite the force of general economic arguments which suggest that they reduce aggregate welfare. Possible motivations for trade restrictions are identified as those which increase national welfare, such as the optimum tariff, and those which foster either income redistribution or the preservation of status quo. While sometimes politically popular, these motivations for trade restrictions ignore the possibility of retaliation and usually fail tests based upon basic welfare analysis. Trade agreements of the 1990s are discussed, including the Uruguay Round, and distinctionsare made between Free Trade Areas and Customs Unions as well as between trade creation and trade diversion.Chapter 10 considers the possible uses of trade policies to promote the growth of developing economies. The chapter reviews the relative successes of different development strategies. It examines arguments for and the results of import-substituting industrialization. The phenomenon of economic dualism, referring to the coexistence of capital intensive industrial sectors and low-wage traditional sectors, and of uneven development are considered. The chapter concludes with a discussion of export led growth and the experience of the high performing Asian economies.Chapter 11 considers recent controversies in trade policy. The first part of the chapter considers the notion of strategic trade policy, which first arose in the 1990s. Strategic trade policy refers to the use of trade (and other) tools for channeling resources to sectors targeted for growth by industrial country governments. The chapter presents some commonly voiced arguments for intervention in particular sectors of the economy, and then shows how these arguments are critically flawed. The second part of the chapter introduces more sophisticated arguments for strategic trade policy. The most persuasive of these is the existence of some form of market failure. The second part of the chapter considers the impact of rising trade on workers in developing countries, and more broadly, the debate over globalization. This debate has been argued in academia and policy circles, but also on the streets of Seattle, Genoa, and other cities hosting global economic summits.。
《国际经济学》教师手册及课后习题答案(克鲁格曼,第六版)imch06
HAPTER 6ECONOMIES OF SCALE, IMPERFECT COMPETITION, AND INTERNATIONAL TRADEChapter OrganizationEconomies of Scale and International Trade: An OverviewEconomies of Scale and Market StructureThe Theory of Imperfect CompetitionMonopoly: A Brief ReviewMonopolistic CompetitionLimitations of the Monopolistic Competition ModelMonopolistic Competition and TradeThe Effects of Increased Market SizeGains from an Integrated Market: A Numerical ExampleEconomies of Scale and Comparative AdvantageThe Significance of Intraindustry TradeWhy Intraindustry Trade MattersCase Study: Intraindustry Trade in Action: The North American Auto Pact DumpingThe Economics of DumpingCase Study: AntiDumping as ProtectionReciprocal DumpingThe Theory of External EconomiesSpecialized SuppliersLabor Market PoolingKnowledge SpilloversExternal Economies and Increasing ReturnsExternal Economies and International TradeExternal Economies and the Pattern of TradeTrade and Welfare with External EconomiesBox: Tinseltown EconomicsDynamic Increasing ReturnsSummaryAppendix: Determining Marginal RevenueCHAPTER OVERVIEWIn previous chapters, trade between nations was motivated by their differences in factor productivity or relative factor endowments. The type of trade which occurred, for example of food for manufactures, is based on comparative advantage and is called interindustry trade. This chapter introduces trade based on economies of scale in production. Such trade in similar productions is called intraindustry trade, and describes, for example, the trading of one type of manufactured good for another type of manufactured good. It is shown that trade can occur when there are no technological or endowment differences, but when there are economies of scale or increasing returns in production.Economies of scale can either take the form of 1) external economies whereby the cost per unit depends on the size of the industry but not necessarily on the size of the firm; or as 2) internal economies, whereby the production cost per unit of output depends on the size of the individual firm but not necessarily on the size of the industry. Internal economies of scale give rise to imperfectly competitive markets, unlike the perfectly competitive market structures that were assumed to exist in earlier chapters. This motivates the review of models of imperfect competition, including monopoly and monopolistic competition. The instructor should spend some time making certain that students understand the equilibrium concepts of these models since they are important for the justification of intraindustry trade.In markets described by monopolistic competition, there are a number of firms in an industry, each of which produces a differentiated product. Demand for its good depends on the number of other similar products available and their prices. This type of model is useful for illustrating that trade improves the trade-off between scale and variety available to a country. In an industry described by monopolistic competition, a larger market -- such as that which arises through international trade -- lowers average price (by increasing production and lowering average costs) and makes available for consumption a greater range of goods. While an integrated markets also supports the existence of a larger number of firms in an industry, the model presented in the text does not make predictions about where these industries will be located.It is also interesting to compare the distributional effects of trade when motivated by comparative advantage with those when trade is motivated by increasing returns to scale inproduction. When countries are similar in their factor endowments, and when scale economies and product differentiation are important, the income distributional effects of trade will be small. You should make clear to the students the sharp contrast between the predictions of the models of monopolistic competition and the specific factors and Heckscher-Ohlin theories of international trade. Without clarification, some students may find the contrasting predictions of these models confusing.Another important issue related to imperfectly competitive markets is the practice of price discrimination, namely charging different customers different prices. One particularly controversial form of price discrimination is dumping, whereby a firm charges lower prices for exported goods than for goods sold domestically. This can occur only when domestic and foreign markets are segmented. While there is no good economic justification for the view that dumping is harmful, it is often viewed as an unfair trade practice.The other type of economies of scale, external economies, has very different economic implications than internal economies. Since external economies of scale occur at the industry level rather than the firm level, it is possible for there to be many small competitors in an industry, in contrast to the structure which develops under internal economies of scale. Under external economies, trade may not be beneficial to all countries and there may be some justification for protectionism. Dynamic scale economies, which arise when unit production costs fall with cumulative production over time, rather than with current levels of production, also provide a potential justification for protectionism.ANSWERS TO TEXTBOOK PROBLEMS1. Cases a and d reflect external economies of scale since concentration of the productionof an industry in a few locations reduces the industry's costs even when the scale of operation of individual firms remains small. External economies need not lead to imperfect competition. The benefits of geographical concentration may include a greater variety of specialized services to support industry operations and larger labor markets or thicker input markets. Cases b and c reflect internal economies of scale and occur at the level of the individual firm. The larger the output of a product by a particular firm, the lower its average costs. This leads to imperfect competition as in petrochemicals, aircraft, and autos.2. The profit maximizing output level of a monopolist occurs where marginal revenueequals marginal cost. Unlike the case of perfectly competitive markets, under monopoly marginal revenue is not equal to price. Marginal revenue is always less than price under imperfectly competitive markets because to sell an extra unit of output the firm must lower the price of all units, not just the marginal one.3. By concentrating the production of each good with economies of scale in one countryrather than spreading the production over several countries, the world economy will use the same amount of labor to produce more output. In the monopolistic competition model, such a concentration of labor benefits the host country, which can also capture some monopoly rents, while it may hurt the rest of the world which could then face higher prices on its consumption goods. In the external economies case, such monopolistic pricing behavior is less likely since imperfectly competitive markets are less likely.4. Although this problem is a bit tricky and the numbers don't work out nicely, a solutiondoes exist. The first step in finding the solution is to determine the equilibrium number of firms in the industry. The equilibrium number of firms is that number, n, at which price equals average cost. We know that AC=F/X + c , where F represents fixed costs of production, X represents the level of sales by each firm, and c represents marginal costs. We also know that P=c+ (1/bn), where P and b represent price and the demand parameter. Also, if all firms follow the same pricing rule, then X=S/n where S equals total industry sales. So, set price equal to average cost, cancel out the c's and replace X by S/n. Rearranging what is left yields the formula n2=S/Fb. Substitute in S=900,000+ 1,600,000+ 3,750,000 =6,250,000, F=750,000,000 and b=1/30,000. The numerical answer is that n=15.8 firms. However, since you will never see .8 firms, there will be15 firms that enter the market, not 16 firms since the last firm knows that it can notmake positive profits. The rest of the solution is straight-forward. Using X=S/n, output per firm is 41,666 units. Using the price equation, and the fact that c=5,000, yields an equilibrium price of $7,000.5. a. The relatively few locations for production suggest external economies of scale inproduction. If these operations are large, there may also be large internal economies of scale in production.b. Since economies of scale are significant in airplane production, it tends to be done by asmall number of (imperfectly competitive) firms at a limited number of locations. One such location is Seattle, where Boeing produces.c. Since external economies of scale are significant in semiconductor production,semiconductor industries tend to be concentrated in certain geographic locations. If, for some historical reason, a semiconductor is established in a specific location, the export of semiconductors by that country is due to economies of scale and not comparative advantage.d. "True" scotch whiskey can only come from Scotland. The production of scotchwhiskey requires a technique known to skilled distillers who are concentrated in the region. Also, soil and climactic conditions are favorable for grains used in local scotch production. This reflects comparative advantage.e. France has a particular blend of climactic conditions and land that is difficult toreproduce elsewhere. This generates a comparative advantage in wine production.6. The Japanese producers are price discriminating across United States and Japanesemarkets, so that the goods sold in the United States are much cheaper than those sold in Japan. It may be profitable for other Japanese to purchase these goods in the United States, incur any tariffs and transportation costs, and resell the goods in Japan. Clearly, the price differential across markets must be non-trivial for this to be profitable.7. a. Suppose two countries that can produce a good are subject to forward-falling supplycurves and are identical countries with identical curves. If one country starts out as a producer of a good, i.e. it has a head start even as a matter of historical accident, then all production will occur in that particular country and it will export to the rest of the world.b. Consumers in both countries will pay a lower price for this good when externaleconomies are maximized through trade and all production is located in a single market. In the present example, no single country has a natural cost advantage or is worse off than it would be under autarky.8. External economies are important for firms as technology changes rapidly and as the“cutting edge” moves quickly with frequent innovations. As this process slows, manufacturing becomes more routine and there is less advantage conferred by external economies. Instead, firms look for low cost production locations. Since externaleconomies are no longer important, firms find little advantage in being clustered and it is likely that locations other than the high-wage original locations are chosen.FURTHER READINGSFrank Graham. "Some Aspects of Protection Further Considered." Quarterly Journal of Economics 36 (1923) pp.199-227.Elhanan Helpman and Paul Krugman.Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy. Cambridge: MIT Press, 1985.Henryk Kierzkowski, ed. Monopolistic Competition and International Trade. Oxford: Clarendon Press, 1984.Staffan Burenstam Linder. An Essay on Trade and Transformation. New York: John Wiley and Sons, 1961.Michael Porter. The Competitive Advantage of Nations. New York: Free Press, 1990. Annalee Saxenian. Regional Advantage. Cambridge: Harvard University Press, 1994.。
《国际经济学》教师手册及课后习题答案(克鲁格曼,第六版)imch12
HAPTER 12NATIONAL INCOME ACCOUNTING AND THE BALANCE OF PAYMENTSChapter OrganizationThe National Income AccountsNational Product and National IncomeCapital Depreciation, International Transfers, and Indirect Business TaxesGross Domestic ProductNational Income Accounting in a Closed EconomyConsumptionInvestmentGovernment PurchasesThe National Income Identity for an Open EconomyAn Imaginary Open EconomyThe Current Account and Foreign IndebtednessSaving and the Current AccountPrivate and Government SavingsCase Study: Government Budget Deficit Reduction May Not Increase the Current Account SurplusThe Balance of Payments AccountsExamples of Paired TransactionsThe Fundamental Balance of Payments IdentityThe Current Account, Once AgainThe Financial AccountThe Capital AccountThe Statistical DiscrepancyOfficial Reserve TransactionsBox: The Mystery of the Missing SurplusCase Study: Is the United States the World's Biggest Debtor?SummaryCHAPTER OVERVIEWThis chapter introduces the international macroeconomics section of the text. The chapter begins with a brief discussion of the focus of international macroeconomics. You may want to contrast the type of topics studied in international trade, such as the determinants of the patterns of trade and the gains from trade, with the issues studied in international finance, which include unemployment, savings, trade imbalances, and money and the price level. You can then "preview" the manner in which the theory taught in this section of the course will enable students to better understand important and timely issues such as the U.S. trade deficit, the experience with international economic coordination, European Economic and Monetary Union, and the financial crises in Asia and other developing countries.The core of this chapter is a presentation of national income accounting theory and balance of payments accounting theory. A solid understanding of these topics proves useful in other parts of this course when students need to understand concepts such as the intertemporal nature of the current account or the way in which net export earnings are required to finance external debt. Students will have had some exposure to closed economy national income accounting theory in previous economics courses. You may want to stress that GNP can be considered the sum of expenditures on final goods and services or, alternatively, the sum of payments to domestic factors of production. You may also want to explain that separating GNP into different types of expenditures allows us to focus on the different determinants of consumption, investment, government spending, and net exports.The relationship between the current account, savings, investment, and the government budget deficit should be emphasized. It may be useful to draw an analogy between the net savings of an individual and the net savings of a country to reinforce the concept of the current account as the net savings of an economy. Extending this analogy, you may compare the net dissavings of many students when they are in college, acquiring human capital, and the net dissavings of a country that runs a current account deficit to build up its capital stock. You may also want to contrast a current account deficit that reflects a lot of investment with a current account deficit that reflects a lot of consumption to make the point that all current account deficits are not the same, nor do they all warrant the same amount of concern. The chapter includes a case study on the current account imbalances of the United States and Japan in the 1980s that allows students to frame a policy debate in the context of the accounting relationships presented in the chapter.Balance of payments accounting will be new to students. The text stresses the double-entry bookkeeping aspect of balance of payments accounting. The 1997 U.S. balance of payments accounts provide a concrete example of these accounts. Large statistical discrepancy between the current and capital accounts are discussed in a box on the apparent global current account deficit. These statistical discrepancies illustrate some real-world difficulties in measuring international payments.Note that the book uses the new current / financial / capital account definitions. The old capital account is now the financial account. The current account is the same except that unilateral asset transfers [debt forgiveness or immigrants moving wealth with them] are now in the new capital account. Credits and debits are marked in the same manner; if money comes into a country, it is a credit. A description of the changes along with revised estimates for 1982-98 can be found in the article by Christopher Bach (see references). These changes were made in conjunction with the IMF’s new standards. A des cription of these new standards can be found in the Survey of Current Business Article listed at the end of the references.The chapter concludes with a discussion of official reserve transactions. You may want to stress that, from the standpoint of financing the current account, these official capital flows play the same role as other capital flows. You may also briefly mention that there are additional macroeconomic implications of central-bank foreign asset transactions. A detailed discussion of these effects will be presented in Chapter 17.ANSWERS TO TEXTBOOK PROBLEMS1. The reason for including only the value of final goods and services in GNP, as stated inthe question, is to avoid the problem of double counting. Double counting will not occur if intermediate imports are subtracted and intermediate exported goods are added to GNP accounts. Consider the sale of U.S. steel to Toyota and to General Motors.The steel sold to General Motors should not be included in GNP since the value of that steel is subsumed in the cars produced in the United States. The value of the steel sold to Toyota will not enter the national income accounts in a more finished state since the value of the Toyota goes towards Japanese GNP. The value of the steel should be subtracted from GNP in Japan since U.S. factors of production receive payment for it.2. Equation 2 can be written as CA = (S p - I) + (T - G). Higher U.S. barriers to importsmay have little or no impact upon private savings, investment, and the budget deficit.If there were no effect on these variables then the current account would not improve with the imposition of tariffs or quotas. It is possible to tell stories in which the effect on the current account goes either way. For example, investment could rise in industries protected by the tariff, worsening the current account. (Indeed, tariffs are sometimes justified by the alleged need to give ailing industries a chance to modernize their plant and equipment.) On the other hand, investment might fall in industries that face a higher cost of imported intermediate goods as a result of the tariff. In general, permanent and temporary tariffs have different effects. The point of the question is thata prediction of the manner in which policies affect the current account requires ageneral-equilibrium, macroeconomic analysis.3. a. The purchase of the German stock is a debit in the U.S. financial account. There is acorresponding credit in the U.S. financial account when the American pays with a check on his Swiss bank account because his claims on Switzerland fall by the amount of the check. This is a case in which an American trades one foreign asset for another.b. Again, there is a U.S. financial account debit as a result of the purchase of a Germanstock by an American. The corresponding credit in this case occurs when the German seller deposits the U.S. check in its German bank and that bank lends the money to a German importer (in which case the credit will be in the U.S. current account) or to an individual or corporation that purchases a U.S. asset (in which case the credit will be in the U.S. financial account). Ultimately, there will be some action taken by the bank which results in a credit in the U.S. balance of payments.c. The foreign exchange intervention by the French government involves the sale of aU.S. asset, the dollars it holds in the United States, and thus represents a debit item in the U.S. financial account. The French citizens who buy the dollars may use them to buy American goods, which would be an American current account credit, or an American asset, which would be an American financial account credit.d. Suppose the company issuing the traveler’s check uses a checking account in France tomake payments. When this company pays the French restaurateur for the meal, its payment represents a debit in the U.S. current account. The company issuing the traveler’s check must sell assets (deplete its checking account in France) to make this payment. This reduction in the French assets owned by that company represents a credit in the American financial account.e. There is no credit or debit in either the financial or the current account since there hasbeen no market transaction.f. There is no recording in the U.S. Balance of Payments of this offshore transaction.4. The purchase of the answering machine is a current account debit for New York, and acurrent account credit for New Jersey. When the New Jersey company deposits the money in its New York bank there is a financial account credit for New York and a corresponding debit for New Jersey. If the transaction is in cash then the corresponding debit for New Jersey and credit for New York also show up in their financial accounts.New Jersey acquires dollar bills (an import of assets from New York, and therefore a debit item in its financial account); New York loses the dollars (an export of dollar bills, and thus a financial account credit). Notice that this last adjustment is analogous to what would occur under a gold standard (see Chapter 19).5. a. Since non-central bank capital inflows fell short of the current-account deficit by $500million, the balance of payments of Pecunia (official settlements balance) was -$500 million. The country as a whole somehow had to finance its $1 billion current-account deficit, so Pecunia's net foreign assets fell by $1 billion.b. By dipping into its foreign reserves, the central bank of Pecunia financed the portion ofthe country's current-account deficit not covered by private financial inflows. Only if foreign central banks had acquired Pecunian assets could the Pecunian central bank have avoided using $500 million in reserves to complete the financing of the current account. Thus, Pecunia's central bank lost $500 million in reserves, which would appear as an official financial inflow (of the same magnitude) in the country's balance of payments accounts.c. If foreign official capital inflows to Pecunia were $600 million, the country had abalance of payments surplus of $100 million. Put another way, the country needed only $1 billion to cover its current-account deficit, but $1.1 billion flowed into the country.The Pecunian central bank must, therefore, have used the extra $100 million in foreign borrowing to increase its reserves. Purchases of Pecunian assets by foreign central banks enter their countries' balance of payments accounts as outflows, which are debit items. The rationale is that the transactions result in foreign payments to the Pecunians who sell the assets.d. Along with non-central bank transactions, the accounts would show an increase inforeign official reserve assets held in Pecunia of $600 million (a financial account credit, or inflow) and an increase Pecunian official reserve assets held abroad of $100billion (a financial account debit, or outflow). Of course, total net financial inflows of $1 billion just cover the current-account deficit.6. A current account deficit or surplus is a situation which may be unsustainable in thelong run. There are instances in which a deficit may be warranted, for example to borrow today to improve productive capacity in order to have a higher national income tomorrow. But for any period of current account deficit there must be a corresponding period in which spending falls short of income (i.e. a current account surplus) in order to pay the debts incurred to foreigners. In the absence of unusual investment opportunities, the best path for an economy may be one in which consumption, relative to income, is smoothed out over time.The reserves of foreign currency held by a country's central bank change with nonzero values of its official settlements balance. Central banks use their foreign currency reserves to influence exchange rates. A depletion of foreign reserves may limit the central bank's ability to influence or peg the exchange rate. For some countries (particularly developing countries), central-bank reserves may be important as a way of allowing the economy to maintain consumption or investment when foreign borrowing is difficult. A high level of reserves may also perform a signaling role by convincing potential foreign lenders that the country is credit-worthy. The balance of payments of a reserve-currency center (such as the United States under the Bretton Woods system) raises special issues best postponed until Chapter 18.7. The official settlements balance, also called the balance of payments, shows the netchange in international reserves held by U.S. government agencies, such as the Federal Reserve and the Treasury, relative to the change in dollar reserves held by foreign government agencies. This account provides a partial picture of the extent of intervention in the foreign exchange market. For example, suppose the Bundesbank purchases dollars and deposits them in its Eurodollar account in a London bank.Although this transaction is a form of intervention, it would not appear in the official settlements balance of the United States. Instead, when the London bank credits this deposit in its account in the United States, this transaction will appear as a private financial flow.8. A country could have a current account deficit and a balance of payments surplus atthe same time if the financial and capital account surpluses exceeded the current account deficit. Recall that the balance of payments surplus equals the current accountsurplus plus the financial account surplus plus the capital account surplus. If, for example, there is a current account deficit of $100 million, but there are large capital inflows and the capital account surplus is $102 million, then there will be a $2 million balance of payments surplus.This problem can be used as an introduction to intervention (or lack thereof) in the foreign exchange market, a topic taken up in more detail in Chapter 17. The government of the United States did not intervene in any appreciable manner in the foreign exchange markets in the first half of the 1980s. The “textbook” consequence of this is a balance of payments of zero, while the actual figures showed a slight balance of payments surplus between 1982 and 1985. These years were also marked by large current account deficits. Thus, the financial inflows into the United States between 1982 and 1985 exceeded the current account deficits in those years.FURTHER READINGSChristopher Bach, “U.S. International Transactions, Revised Estimates for 1982-98,” Survey of Current Business, 79 (July 1999):60-74.Peter Hooper and J. David Richardson, eds. International Economic Transactions. Chicago: University of Chicago Press, 1991.David H. Howard. "Implications of the U.S. Current Account Deficit." Journal of Economic Perspectives 3 (Fall 1989), pp. 153-165.International Monetary Fund. Final Report of the Working Party on the Statistical Discrepancy in World Current Account Balances. Washington, D.C.: International Monetary Fund, September 1987.Robert E. Lipsey. "Changing Patterns of International Investment in and by the United States." in Martin S. Feldstein, ed., The United States in the World Economy. Chicago: University of Chicago Press, 1988, pp. 475-545.Rita M. Maldonado. "Recording and Classifying Transactions in the Balance of Payments." International Journal of Accounting 15 (fall 1979), pp. 105-133.James E. Meade. The Balance of Payments. Ch.s 1-3. London: Oxford University Press. 1952.Lois Stekler. "Adequacy of International Transactions and Position Data for Policy Coordination." in William H. Branson, Jacob Frenkel, and Morris Goldstein, eds. International Policy Coordination and Exchange Rate Fluctuations. Chicago: University of Chicago Press. 1990.Robert M. Stern, Charles F. Schwartz, Robert Triffin, Edward M. Bernstein and Walter Lederer. The Presentation of the Balance of Payments: A Symposium. Princeton Essays in International Finance 123. International Finance Section, Department of Economics, Princeton University, August 1977.United States Bureau of the Budget, Review Committee for Balance of Payments Statistics. The Balance of Payments Statistics of the United States: A Review and Appraisal. Washington, D.C.: Government Printing Office, 1965.“The International Monetary Fund’s New Standards for Economic Statistics,” Survey of Current Business, 76 (October 1996):37-47.。
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Copyright © 2003 Pearson Education, Inc.
Slide 19-10
“fundamental disequilibriums” that had led to parity changes and speculative attacks under fixed rates.
– Figure 19-1 shows that a temporary fall in a country’s export demand reduces that country’s output more under a fixed rate than a floating rate.
Copyright © 2003 Pearson Education, Inc.
Slide 19-6
The Case for Floating Exchange Rates
▪ Exchange Rates as Automatic Stabilizers
• Floating exchange rates quickly eliminate the
disappointing?
▪ What direction should reform of the current system
take?
▪ This chapter compares the macroeconomic policy
problems of different exchange rate regimes.
Y2 Y1
产出, Y
DD2 DD1
3 1
Copyright © 2003 Pearson Education, Inc.
AA1 AA2
Y3 Y2 Y1
产出, Y
Slide 19-8
The Case Against Floating Exchange Rates
▪ There are five arguments against floating rates:
The Case Against Floating Exchange Rates
▪ Destabilizing Speculation and Money Market
Disturbances
• Floating exchange rates allow destabilizing
speculation.
central banks.
– Central banks might embark on inflationary policies (e.g., the German hyperinflation of the 1920s).
• The pro-floaters’ response was that a floating exchange
of the Bretton Woods system and allow:
– Central banks abroad to be able to determine their own domestic money supplies
– The U.S. to have the same opportunity as other countries to influence its exchange rate against foreign currencies
Copyright © 2003 Pearson Education, Inc.
Slide 19-7
The Case for Floating Exchange Rates
(a) 浮动汇率
Figure 19-1: 出口商品需求下降的影响
汇率, E
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2
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1
E1
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(b) 固定汇率 E1
in competitive currency depreciations.
– Countries might adopt policies without considering their possible beggar-thy-neighbor aspects.
Copyright © 2003 Pearson Education, Inc.
▪ The floating exchange rate system, in place since
1973, was not well planned before its inception.
▪ By the mid-1980s, economists and policymakers had
• Supporters of floating exchange rates argue that
forward markets can be used to protect traders against foreign exchange risk.
– The skeptics replied to this argument by pointing out that forward exchange markets would be expensive.
Copyright © 2003 Pearson Education, Inc.
Slide 19-13
The Case Against Floating Exchange Rates
▪ Uncoordinated Economic Policies
• Floating exchange rates leave countries free to engage
• Floating exchange rates make a country more
vulnerable to money market disturbances.
– Figure 19-2 illustrates this point.
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Countries?
▪ Directions for Reform ▪ Summary ▪ Appendix: International Policy Coordination Failures
Copyright © 2003 Pearson Education, Inc.
Slide 19-2
Introduction
inflation rate
Copyright © 2003 Pearson Education, Inc.
Slide 19-5
The Case for Floating Exchange Rates
▪ Symmetry
• Floating exchange rates remove two main asymmetries
because they make relative international prices more unpredictable:
– Exporters and importers face greater exchange risk.
– International investments face greater uncertainty about their payoffs.
Copyright © 2003 Pearson Education, Inc.
Slide 19-9
The Case Against Floating Exchange Rates
▪ Discipline
• Floating exchange rates do not provide discipline for
become more skeptical about the benefits of an
international monetary system based on floating rates.
▪ Why has the performance of floating rates been so
• Monetary policy autonomy • Symmetry • Exchange rates as automatic stabilizers
Copyright © 2003 Pearson Education, Inc.
Slide 19-4
The Case for Floating Exchange Rates
Slide 19-14
The Case Against Floating Exchange Rates
▪ The Illusion of Greater Autonomy
• Floating exchange rates increase the uncertainty in the
economy without really giving macroeconomic policy greater freedom.
– Countries can be caught in a “vicious circle” of depreciation and inflation.
• Advocates of floating rates point out that destabilizing
speculators ultimately lose money.
• Discipline • Destabilizing speculation and money market
disturbances