| 1. | |
Introduction to international macroeconomics | Countries have their own legal tenders, and the price at which these currencies trade is known as the exchange rate. As international macroeconomists, we confront various questions, for example, what determines exchange rates and how exchange rates are linked to the rest of the world, and so on. Countries are financially integrated, and this allows them to decouple their level of income from their level of expenditure, with the difference being known as the current account. |  |
| 2. | |
Exchange rate essentials; Exchange rates in practice; The market for foreign exchange | The exchange rate in a country is the price of a unit of foreign currency in terms of the domestic currency. This price is determined in the spot market for foreign exchange. The exchange rate is used to convert the prices of goods and assets into a common currency to allow meaningful price comparisons. | |
| 3. | |
Arbitrage and spot exchange rates/interest rates | Arbitrage on currencies means that spot exchange rates are approximately equal in different forex markets. Arbitrage on interest rates leads to no-arbitrage conditions in the form of the covered or uncovered interest parity. | |
| 4. | |
The monetary approach to exchange rates: purchasing power parity and money market equilibrium in a simple model | Purchasing power parity (PPP) implies that the exchange rate should equal the relative price level in the two countries. A simple monetary model explains price levels in terms of money supply levels and real income levels. Because PPP can explain exchange rates in terms of price levels, the two together can be used to develop a monetary approach. | |
| 5. | |
Implications and evidence of the monetary approach and the monetary approach with a general model | The monetary approach to exchange rate determination in the long run has implications for economic policy. Policy makers and the public generally prefer a low-inflation environment. | |
| 6. | |
Exchange rates and interest rates in the short run and the asset approach to exchange rates | In the short run, we assume prices are sticky and the asset approach to exchange rates is valid. | |
| 7. | |
A complete theory unifying the monetary an asset approaches | The complete theory that unifies the monetary and asset approaches can be used to analyze the impact of changes to monetary policy as well as other shocks to the economy. | |
| 8. | |
Measuring macroeconomic activity: an overview and national accounts: product, expenditure, income | The records kept in the national income and products accounts, the balance of payments account, and the net international investment position track the data on national flows of expenditure, product, income and wealth, and international flows of goods, services, income, assets. | |
| 9. | |
Balance of payments accounts: international transactions | All international trades in goods and services and in assets are recorded in an account known as the balance of payments (BOP). As a result of double-entry bookkeeping, and allowing for gifts and transfers, the BOP must sum to zero. | |
| 10. | |
The long-run budget constraint and gains from consumption smoothing | The condition that guarantees that debts are serviced is the long-run budget constraint: the present value of future trade deficits must equal the present value of initial wealth. | |
| 11. | |
Gains from efficient investment and gains from diversification of risk | Without borrowing and lending internationally, a country can reduce its risk by the international diversification of income claims. In practice, only capital income claims (capital assets) are tradable. Labor is not a tradable asset. | |
| 12. | |
Goods and forex market equilibria and money market equilibrium | The IS curve is a line, a set of points of output and interest rates where the goods markets is in equilibrium and the LM curve is a line, a set of points of output and interest rates where the money market is in equilibrium. The FX market is summarized by the uncovered interest parity. | |
| 13. | |
The short-run IS-LM-FX model of an open economy | The IS-LM-FX diagram can be used to assess the impact of various macroeconomic policies in the short run. | |
대구광역시 동구 동내로 64(동내동 1119) 우)41061
COPYRIGHT keris. all rights reserved
페이스북
트위터
카카오톡
네이버밴드
링크복사
