文档介绍：Output,theInterestRate, andtheExchangeRate
ThemodeldevelopedinthischapterisanextensionoftheopeneconomyIS-LMmodel,knownaOutput,theInterestRate, andtheExchangeRate
ThemodeldevelopedinthischapterisanextensionoftheopeneconomyIS-LMmodel,knownastheMundell-Flemingmodel.
Themainquestionswetrytosolveare:
Whatdeterminestheexchangerate?
Howcanpolicymakersaffectexchangerates?
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©2006PrenticeHallBusinessPublishing Macroeconomics,4/eOlivierBlanchard
Equilibriuminthe GoodsMarket
Equilibriuminthegoodsmarketcanbedescribedbythefollowingequations:
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©2006PrenticeHallBusinessPublishing Macroeconomics,4/eOlivierBlanchard
Equilibriuminthe GoodsMarket
ConsumptionCdependspositivelyondisposableincomeY-T.
InvestmentIdependspositivelyonoutputY,andnegativelyontherealinterestrater.
GovernmentspendingGistakenasgiven.
ThequantityofimportsIMdependspositivelyonbothoutputYandtherealexchangerate.
ExportsXdependpositivelyonforeignoutputY*andnegativelyontherealexchangerate.
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©2006PrenticeHallBusinessPublishing Macroeconomics,4/eOlivierBlanchard
Equilibriuminthe GoodsMarket
Themainimplicationofthisequationisthatboththerealinterestrateandtherealexchangerateaffectdemandand,inturn,equilibriumoutput:
Anincreaseintherealinterestrateleadstoadecreaseininvestmentspending,andtoadecreaseinthedemandfordomesticgoods.
Anincreaseintherealexchangerateleadstoashiftindemandtowardforeigngoods,andtoadecreaseinnetexports.
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©2006PrenticeHallBusinessPublishing Macroeconomics,4/eOlivierBlanchard
Equilibriuminthe GoodsMarket
Inthischapterwemaketwosimplifications:
Boththedomesticandtheforeignpricelevelsaregiven;thus,thenominalandtherealexchangeratemovetogether:
Thereisnoinflation,neitheractualnorexpected.
Then,theequilibriumconditionbecomes:
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©2006PrenticeHallBusinessPublishing Macroeconomics,4/eOlivierBlanchard
Equilibriumin Financialmarkets
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Nowthatwelookatafinanciallyopeneconomy,wemustalsotakeintoaccountthefactthatpeoplehaveachoicebetweendomesticbondsandforeignbonds.
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