国际经济学 Y and E in the long run.ppt

CHP6 Y AND E IN THE SHORT RUN Key terms DD schedule DD曲线 AA schedule AA曲线 Monetary policy fiscal policy货币政策和财政政策 Inflation bias通货膨胀偏向 J-curve J曲线 The degree of pass-through转嫁度 Learning goals P421 Output market equilibrium and assets market equilibrium as well as equilibrium of whole economy Macroeconomic policies and economic adjustments as well as current account introduction Real exchange rate affects the aggregate demand An open economy achieves short-run equilibrium when both asset market and output market are in equilibrium In the short run both monetary and fiscal policies affect the exchange rate and national output, but not in the long run Dynamic analysis on macroeconomic policies, the current account balance and E The AA Schedule homework Use diagrams to illustrate how economic factors affect U.S. dollar exchange rate question Does a permanent fiscal expansion have net effect on output? Why? Evita Peron: dont cry for me Argentina Egalitarianism, Autocracy, Political wisdom Economic skills: Monetary policyFiscal policy summary P451-452 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 5.3 Factors that Shift the AA Schedule Ms/P= L[R*+(Ee-E)/E, Y], ΔMs0, ΔE0, AA shifts upward. Ms/P= L[R*+(Ee-E)/E, Y], ΔP0, ΔR0, ΔE0, AA shifts downward. Ms/P= L[R*+(Ee-E)/E, Y], ΔEe 0, domestic currency return on foreign currency deposit move upward, ΔE0, AA shifts upward. * 5.3 Factors that Shift the AA Schedule Ms/P= L[R*+(Ee-E)/E, Y], ΔR*0, foreign assets provide higher return, to keep IRP, ΔE0, AA shifts upward. A reduction in real money demand has the same effect as an increase in the money supply Ms. Ms/P= L[R*+(Ee-E)/E, Y], ΔMs0, ΔE0, AA shifts upward. * §6 Short Run Equilibrium for an Open Economy P R* Ee are fixed, the short run equilibrium is the intersection of DD and AA, which is the only combination of E and Y consistent with both the equality of output market and asset market equilibrium. E Y DD AA Exchange rate output