《国际经济学（英语）》（黄敏主编 复旦大学出版社）讲义 第8章.ppt

Balance of Payments Adjustments Chapter 8 Balance of Payments Adjustments 8.1 Elasticities Approach 8.2 Multiplier Approach 8.3 Absorption Approach 8.4 Monetary Approach 8.1 Elasticities Approach As a traditional approach to the balance of payments, elasticities approach assumes that capital flows occur only as a means of financing current account transactions. Derivation of the Demand for Foreign Exchange: The quantity of a currency demanded in the foreign exchange market is derived from the country’s demand for imports. 8.1 Elasticities Approach China’s Import Demand Curve and the Demand for dollar 8.1 Elasticities Approach Elasticity of Import Demand and the Elasticity of Foreign Exchange Demand. 8.1 Elasticities Approach Derivation of the Supply of Foreign Exchange The supply of foreign exchange to a country results from its exports of goods and services. 8.1 Elasticities Approach Elasticity of Export Supply and the Elasticity of Foreign Exchange Supply 8.1 Elasticities Approach The elasticities approach centers on changes in the prices of goods and services as the determinant of a country’s balance of payments and the exchange value of its currency. 8.1 Elasticities Approach The Current Account Deficit 8.1 Elasticities Approach The Role of Elasticity The elasticities of the supply of and demand for foreign exchange are fundamental determinants of adjustment to a balance-of-payments deficit. 8.1 Elasticities Approach The Marshall-Lerner Condition The Marshall-Lerner condition specifies the necessary condition for a positive effect of depreciation of domestic currency on the balance of payments. 8.1 Elasticities Approach Assumption Capital flows occur only as a means of financing current account transactions. Trade balance exclusively represents the current account. 8.1 Elasticities Approach CA in domestic currency: Derivate it with e: Initial CA in equilibrium: Then: Rearrange it: Finally: (