In this chapter you will build a model to explain an open economy’s trade balance and exchange rate, use the model to analyze the effects of government budget deficits, use the model to analyze the macroeconomic effects of trade policies, use the model to analyze political instability and capital flight.
This paper presents a stock flow model of two economies (together comprising the whole world)
which trade goods and financial assets with one another. The accounting framework, though
comprehensive in its own terms, is very much simplified (it has interest rates without interest
payments and exchange rate changes without changes in relative prices) so as to reach the main
conclusions as simply and easily as possible.
Mời các bạn cùng tham khảo nội dung tài liệu "Chapter 31: Open economy macroeconomics - Basic Concepts" dưới đây để nắm bắt được nội dung của các câu hỏi bài tập bằng tiếng Anh về các khái niệm cơ bản về kinh tế, kinh tế vĩ mô. Đây là tài liệu phục vụ nhu cầu học tập và ôn thi cho các bạn chuyên ngành Tài chính ngân hàng.
Nhằm giúp các bạn củng cố lại kiến thức đã học và có thêm tài liệu phục vụ nhu cầu học tập và ôn thi về kinh tế vĩ mô, mời các bạn cùng tham khảo nội dung tài liệu "Chapter 32: A macroeconomic theory of the open economy". Hy vọng tài liệu sẽ giúp các bạn tự tin hơn trong kỳ thi sắp tới.
After completing this chapter, students will be able to: Learn how net exports measure the international flow of goods and services, learn how net foreign investment measures the international flow of capital, consider why net exports must always equal net foreign investment,...
Chapter 2 - The open economy. After completing this chapter, students will be able to: Review the simple circular flow diagram of a closed economy; illustrate how the closed economy circular flow diagram can be extended into an open economy circular flow diagram and all of its linkages with the rest of the world; explain the balance of payments accounts, which reflect the logic of the open economy circular flow diagram;...
Chapter 13 - Economics policy in and open economy. After studying this chapter you will be able to: Illustrate why it is difficult to keep exchange rates constant; Explain how foreign exchange market intervention works and why it cannot permanently fix exchange rates; introduce purchasing power parity (PPP) and review the evidence on how well it explains long-run exchange rates; introduce the aggregate demand/aggregate supply (AD/AS) macroeconomic model, which determines price levels;...
Foreign direct investment is often considered as simultaneously being one of the consequences and drivers of
globalisation. In the process of opening up economies to participate in some of the positive impacts of globalisation,
countries position themselves in respect of attracting foreign direct investment. In addition, the ability to attract
foreign direct investment and its positive impact in growing economies is valued as an integral part of the road to
successful economic growth and development. ...
“Economics is a study of mankind in the ordinary business of life.” So wrote
Alfred Marshall, the great 19th-century economist, in his textbook, Principles of
Economics. Although we have learned much about the economy since Marshall’s
time, this definition of economics is as true today as it was in 1890, when the first
edition of his text was published.
Why should you, as a student at the beginning of the 21st century, embark on
the study of economics? There are three reasons.
Foundations of International Macroeconomics is an innovative text that offers the first integrative modern treatment of the core issues in open economy macroeconomics and finance. With its clear and accessible style, it is suitable for first-year graduate macroeconomics courses as well as graduate courses in international macroeconomics and finance. Each chapter incorporates an extensive and eclectic array of empirical evidence. For the beginning student, these examples provide motivation and aid in understanding the practical value of the economic models developed.
The tax rules of the United States and of foreign countries affect multinational
corporations in a variety of ways. Researchers at the National Bureau of Eco-
nomic Research have been studying the impact of taxation on multinational
corporations for several years. From time to time, the results of this research
have been presented at NBER conferences and subsequently published in
NBER volumes. The papers in the current volume, which were presented at
such a conference in January 1994, were the result of studies during the previ-...
The global trading system is undergoing a period of transition. Shifting economic
circumstances, major advances in technology and the emergence of
new players on the global scene, all underscore that we are on the cusp of
big changes. Persistent imbalances, driven largely by macro-economic
factors continue to be a cause of concern in some major economies.
I am grateful for the support of Dr Brian Hindley and Dr Razeen Sally, of the
London School of Economics, whose guidance, encouragement and wisdom
were always available to me.
I wish to thank the intellectual property directors of pharmaceutical companies
and associations and the various government officials who openly and candidly
provided me with information regarding the realities of intellectual property
The purpose of this book is to examine the experience of a number of
countries in grappling with the problems of reconciling the two fields of
competition policy and intellectual property rights. The first two parts
of the book indicate the variation in legislative models as well as the
wide variety of judicial and administrative doctrines that have been
used. The jurisdictions selected for study are the three major trading
blocks with the longest experience of case law, the EU, the USA and
Japan, and three less populous countries with open economies,
Australia, Ireland and Singapore.
During the past two decades, two prominent influences—globalization
and the information revolution—have brought about profound
changes in the division of powers within nations as well as beyond
nation-states. As a result, the world has gradually but steadily moved
from closed-economy centralized governance to open-economy
globalized and localized governance—sometimes called “glocalized”
governance. International security concerns in recent years
have somewhat dampened this change process.
Our setup allows us to disentan-
gle the implications of these two alternative pricing mechanisms that are standard in the
open-economy macro literature. In our model, di®erent assumptions regarding the pricing
decisions of ¯rms are virtually inconsequential for the properties of aggregate variables, other
than the terms of trade. In particular, the real exchange rate and the international relative
price of ¯nal tradable goods behave similarly across the two price setting regimes.
The value of the share
depends on how well its property rights are enforced. The enforcement of property rights
is usually undertaken by both individual owners and the state. In economies where the
state does not effectively enforce property rights, the enforcement by individual owners
plays a relatively more important role. The structure of share ownership affects the
degree to which corporate contracts are enforced, because it affects the owners’ abilities
and incentives to enforce the property rights delineated by the contracts.
In this paper we show that nontraded goods (in ¯nal consumption and in retail services)
play an important role in exchange rate behavior in the context of an otherwise standard
open-economy macro model. In our model, nontraded goods have an important role even
though °uctuations in the relative price of nontraded goods account for a small proportion
of real exchange rate °uctuations.
Our quantitative study with nontraded goods generates
implications along several dimensions that are more closely in line with the data relative to
the model that abstracts from nontraded goods.