国际贸易与金融双语ch.ppt

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1、International EconomicsBy Robert J.Carbaugh9th Edition,Chapter 15:Exchange-Rate Adjustments and the Balance of Payments,Carbaugh,Chap.15,2,Exchange rate adjustments,Exchange-rate adjustment and the BOP,Automatic mechanisms may restore balance-of-payments equilibrium,but at the cost of recession or i

2、nflationAs an alternative,governments allow exchange rates to changeFloating exchange rates,determined by marketsDevaluing or revaluing fixed exchange rates,Carbaugh,Chap.15,3,Exchange rate adjustments,Exchange rate effects on costs&prices,Impact of appreciation or depreciation on costs depends on t

3、he proportion of inputs priced in foreign vs.domestic currencyAs foreign-currency denominated costs rise as a proportion of total costs,exchange rate changes have less effect on the foreign currency price and more effect on the domestic priceIf foreign-currency costs are a small part of total costs,

4、exchange rate changes have more impact on foreign currency price of the product and less on domestic price,Carbaugh,Chap.15,4,Exchange rate adjustments,Exchange rate effects on costs&prices,Generally,currency appreciation increases the costs of exports in foreign currency terms,which hurts total exp

5、orts(while depreciation encourages exports)Effect on prices is modified by the ability and willingness of sellers to change their prices,Carbaugh,Chap.15,5,Exchange rate adjustments,Requirements for successful devaluation,When can devaluation correct a payments deficit?Elasticity approachEmphasizes

6、price effects;devaluation works best when demand is elasticAbsorption approachFocus on income effects;domestic spending must fall,tooMonetary approachFocus on change in purchasing power of money and effect on domestic spending,Carbaugh,Chap.15,6,Devaluation as adjustment tool,Elasticity approach,Imp

7、act of currency devaluation depends on price elasticity of domestic demand for imports and of foreign demand for exportsThe less either foreign or domestic demand responds to price changes,the less effect a devaluation will have on the payments imbalance,Carbaugh,Chap.15,7,Devaluation as adjustment

8、tool,Elasticity approach,Marshall-Lerner condition:Devaluation will improve the trade balance if domestic demand elasticity for imports plus foreign demand elasticity for exports is greater than 1Devaluation will worsen the trade balance if the sum of the two elasticities is less than 1If the sum is

9、 equal to 1,devaluation will have no effect,Carbaugh,Chap.15,8,Devaluation as adjustment tool,Devaluation and time horizon,The J-curve effect:in short run,devaluation worsens trade balance,but with time the balance improves(3-5 years)Recognition lags;decision lags;delivery lags;replacement lags;prod

10、uction lagsCurrency pass-through:effect of devaluation depends on how quickly producers pass on higher or lower costs to their customers,Carbaugh,Chap.15,9,Devaluation as adjustment tool,Absorption approach,Emphasizes impact of devaluation on spending behavior of domestic economyBalance of trade is

11、the difference between total domestic output and domestic absorptionPositive balance means output exceeds domestic spendingNegative balance means spending exceeds total production,Carbaugh,Chap.15,10,Devaluation as adjustment tool,Absorption approach(contd),Devaluation will only improve the trade ba

12、lance if output rises relative to domestic absorptionIf an economy is operating below capacity,a devaluation will shift resources into export production and encourage spending on import substitutesIf an economy is operating at full employment,production cannot rise;trade balance can only be cut by s

13、lowing the domestic economy,Carbaugh,Chap.15,11,Devaluation as adjustment tool,Monetary approach,Elasticity and absorption approaches apply only to the trade balance;monetary approach includes capital accountDevaluation may induce a temporary improvement in the balance of paymentsDevaluation increas

14、es the domestic price level,increasing demand for money and drawing foreign capital flows(because of higher interest rates that result),Carbaugh,Chap.15,12,Devaluation as adjustment tool,Monetary approach(contd),In the long run,the inflow of money increases domestic spending,increasing imports and returning the economy to the starting pointDevaluation affects real economy only temporarily;only long run effect is to raise the domestic price level,