中山大学《宏观经济学》课件-第12章InternationalLinking.pptxVIP

1Chapter 12International Linkages中山大学《宏观经济学》 2GlobalizationGoods and services are exported and imported abroad.Investors shift their assets around the world.Opening in China since 1978: first goods, then services and last capital market. 3 slide 4International Trade（2011） 5OutlineExchange RateInternational Trade and IS-LM ModelCapital Mobility and IS-LM Model 6Nominal exchange rate$1=￥?In November 2012, $1=￥6.23. Nominal exchange rate, e, is the price of one currency in terms of another.Direct vs. indirect exchange rate 7Real exchange rate1 American apple = ? Chinese apples where, Pf and P are price levels abroad and domestically.Real exchange rate, R, is relative purchasing power of two currencies. 8Exchange rate systemFixed exchange rate system: central bank stands ready to buy and sell their currencies at a fixed exchange rate.Floating (flexible) exchange rate system: central bank allows exchange rate to be adjusted by market.Clean vs. managed (dirty) floating system 9Exchange rate systemWhat happen if supply for RMB exceeds demand?Under floating system, RMB depreciates, e increases.Under fixed system, central bank buy RMB using official reserve, money supply decreases.It is necessary to have enough official reserve assets under the fixed system. 10TerminologyFixed system: devaluation, revaluationFloating system: depreciation, appreciation 11Exchange rate in the long runPurchasing power parity: R tends to be 1 in the long run, i.e., 1 foreign apple = 1 Chinese appleInterest rate parity, and others. 12The Exchange Rate in the Long Run[Insert Figure 12-2 here] 13OutlineExchange RateInternational Trade and IS-LM ModelCapital Mobility and IS-LM Model 14External accountsCurrent account, NXTrade in goodsTrade in servicesTransfersCapital accountPrivate capital flows in, CFOfficial reserve assets, OR 15External accounts must balance Current account + Capital account = 0 NX CF – OR Balance-of-payment = increase in off