克鲁格曼国际经济学(第六版)的教师手册(含英文习题答案)imch16

CHAPTER 16

OUTPUT AND THE EXCHANGE RATE IN THE SHORT RUN

Chapter Organization

Determinants of Aggregate Demand in an Open Economy

Determinants of Consumption Demand

Determinants of the Current Account

How Real Exchange Rate Changes Affect the Current Account

How Disposable Income Changes Affect the Current Account

The Equation of Aggregate Demand

The Real Exchange Rate and Aggregate Demand

Real Income and Aggregate Demand

How Output is Determined in the Short Run

Output Market Equilibrium in the Short Run: The DD Schedule

Output, the Exchange Rate, and Output Market Equilibrium

Deriving the DD Schedule

Factors that Shift the DD Schedule

Asset Market Equilibrium in the Short Run: The AA Schedule

Output, the Exchange Rate, and Asset Market Equilibrium

Deriving the AA Schedule

Factors that Shift the AA Schedule

Short-Run Equilibrium for the Economy: Putting the DD and AA Schedules Together Temporary Changes in Monetary and Fiscal Policy

Monetary Policy

Fiscal Policy

Policies to Maintain Full Employment

Inflation Bias and Other Problems of Policy Formulation

Permanent Shifts in Monetary and Fiscal Policy

A Permanent Increase in the Money Supply

Adjustment to a Permanent Increase in the Money Supply

A Permanent Fiscal Expansion

Box: The Dollar Exchange Rate and the U.S. Economic Slowdown of 2000-1

Macroeconomic Policies and the Current Account

Gradual Trade Adjustment and Current Account Dynamics

The J-Curve

Exchange-Rate Pass-Through and Inflation

Summary

Appendix I: The IS-LM and the DD-AA Model

Appendix II: Intertemporal Trade and Consumption Demand

Appendix III: The Marshall-Lerner Condition and Empirical Estimates of Trade Elasticities

CHAPTER OVERVIEW

This chapter integrates the previous analysis of exchange rate determination with a model of short-run output determination in an open economy. The model presented is similar in spirit to the classic Mundell-Fleming model, but the discussion goes beyond the standard presentation in its contrast of the effects of temporary versus permanent policies. The distinction between temporary and permanent policies allows for an analysis of dynamic paths of adjustment rather than just comparative statics. This dynamic analysis brings in the possibility of a J-curve response of the current account to currency depreciation. The chapter concludes with a discussion of exchange-rate pass-through, that is, the response of import prices to exchange rate movements.

The chapter begins with the development of an open-economy fixed-price model (Appendix I discuss the relationship between the IS-LM model and the analysis in this chapter). An aggregate demand function is derived using a Keynesian-cross diagram in which the real exchange rate serves as a shift parameter. A nominal currency depreciation increases output by stimulating exports and reducing imports, given foreign and domestic prices, fiscal policy, and investment levels. This yields a positively sloped output-market equilibrium (DD) schedule in exchange rate-output space. A negatively sloped asset-market equilibrium (AA) schedule completes the model. The derivation of this schedule follows from the analysis of previous chapters. For students who have already taken intermediate macroeconomics, you may want to point out that the intuition behind the slope of the AA curve is identical to that of the LM curve, with the additional relationship of interest parity providing the link between the closed-economy LM curve and the open-economy AA curve. As with the LM curve, higher income increases money demand and raises the home-currency interest rate (given real balances). In an open economy, higher interest rates require currency appreciation to satisfy interest parity (for a given future expected exchange rate).

The effects of temporary policies as well as the short-run and long-run effects of permanent policies can be studied in the context of the DD-AA model if we identify the expected future exchange rate with the long-run exchange rate examined in Chapters 14 and 15. In line with this interpretation, temporary policies are defined to be those which leave the expected exchange rate unchanged, while permanent policies are those which move the expected exchange rate to its new long-run level. As in the analysis in earlier chapters, in the long-run prices change to clear markets (if necessary). While the assumptions concerning the expectational effects of temporary and permanent policies are unrealistic as an exact description of an economy, they are pedagogically useful because they allow students to grasp how differing market expectations about the duration of policies can alter their qualitative effects. Students may find the distinction between temporary and permanent, on the one hand, and between short run and long run, on the other, a bit confusing at first. It is probably worthwhile to spend a few minutes discussing this topic.

Both temporary and permanent increases in money supply expand output in the short run through exchange rate depreciation. The long-run analysis of a permanent monetary change once again shows how the well-known Dornbusch overshooting result can occur. Temporary expansionary fiscal policy raises output in the short run and causes the exchange rate to appreciate. Permanent fiscal expansion, however, has no effect on output even in the short run. The reason for this is that, given the assumptions of the model, the currency appreciation in response to permanent fiscal expansion completely "crowds out" exports. This is a consequence of the effect of a permanent fiscal expansion on the expected long-run exchange rate which shifts inward the asset-market equilibrium curve. This model …… 此处隐藏：19208字，全部文档内容请下载后查看。喜欢就下载吧 ……