國(guó)際經(jīng)濟(jì)學(xué)英文版chapter17

TheeAdjustmentMechanismandSynthesisofAutomaticAdjustments收入調(diào)節(jié)機(jī)制與自動(dòng)調(diào)節(jié)的綜合CHAPTER

SEVENTEEN17Inthischapter:IntroductioneDeterminationinaClosedEconomyeDeterminationinaSmallOpenEconomyForeignRepercussionsAbsorptionApproachMonetaryAdjustmentsandSynthesisoftheAutomaticAdjustmentsIntroductionTheeadjustmentmechanismreliesonchangesinthelevelofnationaleofdeficitandsurplusnationstoadjustthebalanceofpayments.TheeadjustmentmechanismisKeynesian,whilethepriceadjustmentmechanismismoretraditional,orclassical.IntroductionAssumptionsDeficitorsurplusarisesinthecurrentaccount.Allprices,wagesandinterestratesremainconstant.Nationoperatesunderfixedexchangesystem.Nationsoperateatlessthanfullemployment.eDeterminationinaClosedEconomyInaclosedeconomy(nointernationaltrade)withoutagovernmentsector,theequilibriumlevelofnationaleandproduction(Y)isdeterminedbyplannedflowofconsumption(C)plusplannedinvestment(I): Y=C(Y)+IDesiredsavingisafunctionofe: S(Y)=Y–C(Y)

eDeterminationinaClosedEconomyInvestment(I)isaninjectionintothesystembecauseitaddstototalexpendituresandstimulatesproduction.Saving(S)isaleakageoutofthesystembecauseitrepresentsegeneratedbutnotspent.Theequilibriumlevelofeiswhere: S=IAtequilibrium,leakagesfromtheeconomy(S)mustbebalancedbyinjectionsintotheeconomy(I).

FIGURE17-1NationaleEquilibriuminaClosedEconomy.eDeterminationinaClosedEconomySinceS=Iatequilibrium,then:ΔI=(1/MPS)ΔYorΔY=(1/MPS)ΔIwhereMPS=marginalpropensitytosave(changeindesiredsavingswithachangeine)Ifk=1/MPS,thenΔY=kΔIkistheKeynesian(closedeconomy)multiplier.Anychangeininvestmentwillinduceamultipliedchangeineasgivenbytheaboveformula.eDeterminationinaClosedEconomyExample: MPS=?sok=1/MPS=1/.25=4

Soanincreaseininvestmentof100leadstoanincreaseineofk(100)=400.ewillincreasebysmallerandsmalleramountsuntiltotalincreaseis400.Whenehasincreasedby400,inducedsavingswillhaveincreasedby100,andequilibriumnationale(S=I)willagainbeachieved.eDeterminationinaSmallOpenEconomyInansmallopeneconomy,theequilibriumconditionrelatinginjectionsandleakagesintheestreamis:(Injections=Leakages)I+X=S+MorX-M=S–IAsurplusinthenation’stradebalance(X-M)mustbepaniedbyanequalexcessofsavingoverdomesticinvestmentattheequilibriumlevelofnationale.eDeterminationinaSmallOpenEconomyInansmallopeneconomy,theequilibriumconditionrelatinginjectionsandleakagesintheestreamis:(Injections=Leakages)I+X=S+MorX-M=S–I(ChangeinInjections=ChangeinLeakages)ΔI+ΔX=ΔS+ΔMFIGURE17-2TheImportFunction.FIGURE17-3NationaleDeterminationinSmallOpenEconomy.ForeignRepercussionsInatwo-nationworld,anautonomousincreaseinexportsinNation1isequaltoanautonomousincreaseinimportsinNation2.IfNation2’simportsreplacedomesticproduction,efalls,inducingNation2’simportstofall,neutralizingpartofautonomousincreaseinimports.ForeignRepercussionsThisinducesforeignrepercussionsonNation1,neutralizingpartofautonomousincreaseinexports.Asaresult,theforeigntrademultiplierforNation1withforeignrepercussionsissmallerthancorrespondingtrademultiplierwithoutforeignrepercussions,anditstradebalancewillnotimproveasmuch.ForeignRepercussionsThisishowbusinesscyclesarepropagatedinternationally:ExpansionineconomicactivityintheU.S.spillsintoimports(exportsofothernations),soU.S.expansionistransmittedtoothernations.AriseinexportsofothernationsexpandstheireconomicactivityandfeedsbacktotheU.S.throughincreasesintheirimportsfromtheU.S.ForeignRepercussionsIn1930s,foreignrepercussionswereanimportantcontributortothespreadoftheGreatDepressiontotherestoftheworld.Onlyaverysmallnationcansafelyignoreforeignrepercussionsfromchangesoccurringintheirowneconomy.AbsorptionApproachTheabsorptionapproachintegratestheeffectofinducedechangesintheprocessofcorrectingabalanceofpaymentsdisequilibriumbyachangeintheexchangerate.Domesticequilibriumisgivenby:Y=C+I+(X–M)AbsorptionApproachDefineA(domesticabsorption)=C+IandB(foreignabsorption)=X–M.Then:Y=A+BorY–A=BAdepreciationofthecurrencyisexpectedtoincreaseB.ThiscanonlyoccurifAfallsorYincreases.Iftheeconomyisatfullemployment,Ycannotincrease.Therefore,adepreciationmustresultinafallinA.AbsorptionApproachForcesthatleadtoafallindomesticabsorption(A):eisredistributedfromwagestoprofits.Thedepreciationincreasespricesandlowersdomesticexpenditures.Thedepreciationpushespeopleintohighertaxbrackets,loweringdisposableeandconsumption.MonetaryAdjustmentsandSynthesisoftheAutomaticAdjustmentsMonetaryAdjustmentsBalanceofpaymentsdeficitstendtoreduceanation’smoneysupplywhich,unlessneutralized,willincreaseinterestrates.Higherinterestratesdiscouragedomesticinvestment,andreducenationale,causingreductionindomesticimports,whichreducesdeficit.Alsoattractsforeigncapital,helpingtofinancedeficit.MonetaryAdjustmentsandSynthesisoftheAutomaticAdjustmentsSynthesisofAutomaticAdjustments Fornationfacingunemploymentandbalanceofpaymentsdeficitatequilibriumlevelofe.FixedExchangeRateSystem: Exchangeratecandepreciateonlywithinnarrowlimitsallowed,stimulatingproductionande.Importsrise,reducingpartofimprovementintradebalanceresultingfromdepreciation.Deficitreducesmoneysupply,increasesinterestrates,reducesinvestmentande,soimportsfall,reducingdeficit.Mostofautomaticadjustmentscomefrommonetaryadjustments,unlessnationdevaluescurrency.MonetaryAdjustmentsandSynthesisoftheAutomaticAdjustmentsSynthesisofAutomaticAdjustments Fornationfacingunemploymentandbalanceofpaymentsdeficitatequilibriumlevelofe.FreelyFlexibleExchangeRateSystem: Currencywilldepreciateuntildeficitisentirelyeliminated.Importsrise,reducingpartofimprovementintradebalanceresultingfromdepreciation.Depreciationrequiredtoeliminatedeficitislargerthanifautomaticadjustmentmechanismswerenotpresent.Nationaleconomyistolargeextentinsulatedfrombalanceofpaymentsdisequilibria,andmostofadjustmentstakeplacethroughexchangeratevariation.MonetaryAdjustmentsandSynthesisoftheAutomaticAdjustmentsDisadvantagesofAutomaticPriceAdjustmentsFreelyFloatingExchangeRatesOvershootinganderraticfluctuationsinexchangeratesinterferewithinternationaltradeandimposecostlyadjustmentburdensthatmaybeunnecessaryinthelongrun.ManagedFloatSystemBeggar-thy-neighbormonetarypoliciestostimulatedomesticeconomyaredisruptiveanddamagingtointernationaltrade.MonetaryAdjustmentsandSynthesisoftheAutomaticAdjustmentsDisadvantagesofAutomaticPriceAdjustmentsFixedExchangeRateSystemPossibilit