chapter 8 How Does the Open Macroeconomy Work.pptVIP免费

HuangzhiyongHuangzhiyongNanjingUniversityofFinance&Economicshzy196896@sina.comTel：84028241ChapterEightChapterEight：：HowDoestheOpenHowDoestheOpenMacroeconomyWork?MacroeconomyWork?一、ThePerformanceofANationalMacroeconomic1、InternalBalance•Fullemployment,oranacceptablylowunemploymentrate•Theeconomy’sproductiongrowsovertime.•Pricestability,oranacceptablylowinflationrate2、Externalbalance•Theachievementofareasonableandsustainablebalanceofpaymentswiththerestoftheworld•Usefulindicator:Officialsettlementsbalanceapproximatelyequaltozero(sothatthecountryisnotlosingofficialinternationalreservesoracquiringunwantedofficialinternationalreserves)二、AframeworkforMacroeconomicanalysis1.DomesticproductiondependsonaggregatedemandY=AD=C+Id+G+(X-M)Nationalexpenditures(E):E=C+Id+GC=C(Y)Id=Id(i)(otherinfluencesasasourceofshockstotheeconomy)2.Tradedependsonincomethevolumeofanation’simportsdependspositivelyonthelevelofrealnationalincomeorproduction.M=M(Y)Assumethatexportvolumesareindependentofthiscountry’snationalincome.3.EquilibriumGDPAssume:allpriceandpricelikevariablesareconstant.Y=AD(Y)=E(Y)+X-M(Y)(Y-C-G)=(E-C-G)+(X-M)orS=Id+(X-M)=Id+IfFigure8.1-EquilibriumDomesticProductionFigure8.1-EquilibriumDomesticProduction4.ThespendingMultiplierinasmall,openEconomyWhennationalspendingrisesinaneconomy,thisextraspendingsetsoffamultiplierprocessofexpansionofdomesticproductionandincome.Themarginalpropensitytosave(s)Themarginalpropensitytoimport(m)Themarginalpropensitytoconsumedomesticproduct(1-s-m)•Thespendingmultiplierforasmallopeneconomyis△Y=G+(1-s-m)×Y△△△Y(1-1+s+m)=G△△Y/G=1/(s+m)△Thevalueofthismultiplieristhesamewhethertheinitialextraspendingismadebythegovernmentorasurgeinconsumption,ariseinprivateinvestmentspending,orariseinexports.Thevalueofthismultiplierissmallerinasmallopeneconomythanthemultiplierinaclosedeconomy.Importsrosebutexportsconstantforthissmallcountry,thecountry’stradebalancethusdeteriorates.5.Foreign-IncomeRepercussionswhenalargenatio...