《國(guó)際經(jīng)濟(jì)學(xué)（英語(yǔ)）》（黃敏主編 復(fù)旦大學(xué)出版社）講義 第8章

1、Balance of Payments Adjustments International EconomicsChapter 8Chapter 8 Balance of Payments Adjustmentsn8.1 Elasticities Approachn8.2 Multiplier Approachn8.3 Absorption Approachn8.4 Monetary ApproachnAs a traditional approach to the balance of payments, elasticities approach assumes that capital f

2、lows occur only as a means of financing current account transactions. nDerivation of the Demand for Foreign Exchange:uThe quantity of a currency demanded in the foreign exchange market is derived from the countrys demand for imports.8.1 Elasticities Approach8.1 Elasticities ApproachChinas Import Dem

3、and Curve and the Demand for dollar 8.1 Elasticities ApproachnElasticity of Import Demand and the Elasticity of Foreign Exchange Demand. nDerivation of the Supply of Foreign ExchangeuThe supply of foreign exchange to a country results from its exports of goods and services.8.1 Elasticities Approach8

4、.1 Elasticities ApproachnElasticity of Export Supply and the Elasticity of Foreign Exchange Supply 8.1 Elasticities ApproachnThe elasticities approach centers on changes in the prices of goods and services as the determinant of a countrys balance of payments and the exchange value of its currency. c

5、ountrys balance of payments and exchange valuethe quantity of foreign exchangethe quantity of goods and servicesa change in the exchange ratethe domestic currency price of goods and servicesa change in the exchange ratea change in the exchange rate8.1 Elasticities ApproachnThe Current Account Defici

6、t 8.1 Elasticities ApproachnThe Role of ElasticityuThe elasticities of the supply of and demand for foreign exchange are fundamental determinants of adjustment to a balance-of-payments deficit. 8.1 Elasticities ApproachnThe Marshall-Lerner ConditionuThe Marshall-Lerner condition specifies the necess

7、ary condition for a positive effect of depreciation of domestic currency on the balance of payments. 8.1 Elasticities ApproachuAssumptionl Capital flows occur only as a means of financing current account transactions.lTrade balance exclusively represents the current account.8.1 Elasticities Approach

8、uCA in domestic currency:u Derivate it with e: u Initial CA in equilibrium: u Then: u Rearrange it:u Finally: ( , ) *CAPXeP M*dCAdXdMPP MePdedede*1eP MPX*dCAeP M dXdMPP MePdePXdede*(1)dCAdX edM eP Mdede Xde M*(1)xmdCAP MdexdX ede XmdM ede M 8.1 Elasticities ApproachuA depreciation to improve CA:u So

9、: u Marshall-Lerner condition states that a depreciation of domestic currency can improve a countrys balance of payments only when the sum of the demand elasticity of exports and the demand elasticity of imports exceeds 1. 0dCAde1xm8.1 Elasticities ApproachnJ-Curve EffectuA depreciation of the domes

10、tic currency is unlikely to immediately improve a countrys balance-of-payments deficit. It is even possible that the depreciation could cause a countrys balance of payments to worsen before it improves. 8.1 Elasticities ApproachuReasons for J-Curve Effect: lRecognition lags of changing competitive c

11、onditions;lDecision lags in forming new business connections and placing new orders;lDelivery lags between the time new orders are placed and their impact on trade and payment flows is felt;lReplacement lags in using up inventories and wearing out existing machinery before placing new orders;lProduc

12、tion lags involved in increasing the output of commodities for which demand has increased.Chapter 8 Balance of Payments Adjustmentsn8.1 Elasticities Approachn8.2 Multiplier Approachn8.3 Absorption Approachn8.4 Monetary Approach8.2 Multiplier Approach nThe multiplier approach is a modified and extend

13、ed version of the elasticity analysis.uThe exchange rate is assumed fixed. The theory is suitable to analyze the adjustment process under a pegged regime. uThe only possibility for BP adjustment in this model is by changes in national income. 8.2 Multiplier ApproachnAssumptions u Underemployed resou

14、rces; u Rigidity of all prices;u Absence of capital mobility;u All exports are made out of current output. 8.2 Multiplier ApproachnNational income:nThus: ()YCIGXM0CCcY0II0GG0XX0MMmY000001()1YCIGXMcm 8.2 Multiplier ApproachnAn expansionary fiscal policy (a rise in G0), an expansionary monetary policy

15、 (a rise in I0 resulting from lower interest rates), or added exports (a rise in X0) can increase national income. u nWhile a contractionary fiscal policy, a contractionary monetary policy or reduced exports will decrease national income. 000101dYdYdYdGdIdXcm8.2 Multiplier ApproachnAn expansionary f

16、iscal policy or an expansionary monetary policy can worsen a countrys current account (and then its balance of payments).u nWhile a contractionary fiscal policy or monetary policy will improve its balance of payments. 0001dCAdCAmdGdIcm 8.2 Multiplier ApproachnAdded exports can improve a countrys cur

17、rent account (then its balance of payments).u nWhile reduced exports will worsen its balance of payments.0101dCAcdXcm8.2 Multiplier ApproachnIn conclusion, when an economy has underemployed resources, fiscal policy, monetary policy and trade policies can be used for adjusting its balance of payments

18、.uContractionary fiscal or monetary policy can improve the balance of payments but at the cost of a decrease in national output. uAdded exports resulting from export-encouraging policies will improve the balance of payments and meanwhile, increase national income. Chapter 8 Balance of Payments Adjus

19、tmentsn8.1 Elasticities Approachn8.2 Multiplier Approachn8.3 Absorption Approachn8.4 Monetary Approach8.3 Absorption ApproachnThe absorption approach assumes that prices remain constant and emphasizes changes in real domestic income. nHence, the absorption approach is a real-income theory of the bal

20、ance of payments. 8.3 Absorption ApproachnAbsorption:nNational income:nCurrent account: =nThus u It shows whether a currency depreciation can improve the current account (then the balance of payments) depends on its effect on national income and on domestic absorption. ACIG()YCIGXMCAYAdCAdYdACAXM8.3

21、 Absorption ApproachnThe effect of depreciation on absorption can be divided into two parts:u lThe induced effect of income changes resulting from depreciation on absorption: lThe direct effect of depreciation on absorption: nTherefore, the effects of depreciation on the current account: u l the inc

22、ome effect:l the absorption effect:a dYddAddAa dYdA(1)ddCAadYdA(1)adYddA8.3 Absorption ApproachnIndirect Effects of Depreciation on National Income uOn the supply side, an effective depreciation requires idle resources in the economy. uOn the demand side, an effective depreciation requires the Marsh

23、all-Lerner condition to be met. uFrom the perspective of governments macroeconomic regulation, an effective depreciation requires loosening protective or restrictive trade polices.8.3 Absorption ApproachnDirect Effects of Depreciation on Absorption uReal cash balance effect eecash balanceexpenditure

24、withdraw financial assets Price of financial assetsPrrequire Msto guaranteeC, ICddA 8.3 Absorption ApproachuIncome redistribution effecteeIncome redistribution from wage earners to profit earnersPCWprofit earners have lower MPCddA 8.3 Absorption Approachu Taxation effecteeEnter higher taxation level

25、sexpenditureNominal YCRequire G/ T to guaranteeddA 8.3 Absorption ApproachnIn conclusion, the absorption approach proposes that depreciation can be effective in improving the balance of payments when u the economy has idle resources;u the economy meets the Marshall-Lerner condition;uthe government f

26、ulfills contractionary fiscal or monetary policy along with depreciation. Chapter 8 Balance of Payments Adjustmentsn8.1 Elasticities Approachn8.2 Multiplier Approachn8.3 Absorption Approachn8.4 Monetary Approach8.4 Monetary ApproachnLeaning with or against the WinduIf a central bank intervenes to su

27、pport or speed along the current trend in the value of its countrys currency in the foreign exchange market, then economists say that its interventions are leaning with the wind. u In contrast, a central banks interventions intended to halt or reverse a recent trend in the value of its countrys curr

28、ency are leaning against the wind. 8.4 Monetary ApproachnForeign Exchange InterventionuCentral banks buy or sell financial assets denominated in foreign currencies in an effort to influence exchange rates. nSterilization of Interventionu A central bank sterilizes foreign exchange interventions when

29、it buys or sells domestic assets in sufficient quantities to prevent the interventions from influencing the domestic money stock. lmonetary base = domestic credit + foreign exchange reserveslSterilization of the sale of foreign exchange reserves requires an equally-sized expansion of domestic credit

30、.8.4 Monetary ApproachnMonetary Equilibrium ConditionuIn equilibrium, the actual money stock equals the quantity of money demanded. Md=kPy m(D+F)=keP*y Ms=MdMs=m(D+F) *PePMd=keP*y 8.4 Monetary ApproachnA Change in Domestic Credit under Fixed Exchange Ratesu If the central bank increases domestic cre

31、dit through an open market purchase of securities, the open market purchase causes the countrys money stock to rise.l m(D+F)keP*y uUnder fixed exchange rates, the countrys monetary authorities must sell foreign exchange reserves to meet the demand for foreign currency. As a result, foreign exchange reserves decline, while the spot exchange rate remains constant. pUnder fixed exchange rates, an increase in domestic credit generates BP deficit, while a decrease in domestic credit results in BP surplus.8.4 Monetary ApproachnA Change in Md under Fixed Exchange Rates uSuppose that there is