,*,单击此处编辑母版标题样式,单击此处编辑母版文本样式,第二级,第三级,第四级,第五级,Intermediate Macroeconomics,9,1,The Open Economy,Why do countries trade with each other?,“No nation was ever ruined by trade.,-Benjamin Franklin,More varieties;higher quality;cheaper price,2,The Open Economy,Merchandise trade as a%of GDP(2005),3,The Open Economy,Merchandise Trade(%of GDP),37.5,63.8,44.9,45.3,62.7,333.7,28.2,58,40.1,21.2,4,The Open Economy,The international flows of capital&goods,Factors affecting CA(savings and investment),Exchange rates,Factors affecting ex-rate,5,International Flows of K&Goods,Capital account¤t account,6,International Flows of K&Goods,(I-S)+NX=0orKA+CA=0,NXTB=CA,(S-I)NFI=-KA,7,International Flows of K&Goods,S I=NX(-KA=CA),If S I 0(KA 0;TB0;CA0;KA 0(S I 0)？是好是坏？,(S I)0 国外比国内更好的投资时机？,量入为出的自律？,18,两期,国家跨时预算约束,C1Q1,TB赤字,C1GDP的60,24,Factors affecting CA-Small Open Economy,What makes a country“small?,-the scale of the economy is so small that it cannot affect the world price level,Price taker-take world real interest rate,25,Factors affecting CA-Small Open Economy,r=r*,Domestic&foreign bonds are perfect substitutes,Capital is perfectly mobile,26,Factors affecting CA-Small Open Economy,Model,27,Factors affecting CA-Small Open Economy,World real i-rate and CA,KA=-CA=I S,r,r*,S,I,CA,I,S,CA(r*),28,Factors affecting CA-Small Open Economy,I,r tends to,$flows in till r=r*,NFI,CA,r,S,I,I,S,E,r*,S=I,IS=S,CA=0,CA0,Shock to investment(better infrastructure),29,Factors affecting CA-Small Open Economy,Y,S=(Y C G),r tends to,$flows in till r=r*,NFI,CA,r,S,I,I,S,E,r*,Hurricane,(,temporary,shock to production),S=I,CA=0,SI=I,CA0,30,Factors affecting CA-Small Open Economy,As Y consistently,C,S would not as much,Also,investment may,r,S,I,I,S,E,r*,Technological improvement,(,permanent,shock to production),temp.shock,31,Factors affecting CA-Small Open Economy,Temporary trade sanction on Iraq,Temporary,shock to Terms of Trade(TOT)to China,TOT,C would not much,S,r tends to,$flows out till r=r*,NFI,CA,r,S,I,I,S,E,SI=I,CA0,32,Factors affecting CA-Small Open Economy,A large portion of oil fields in Iraq were destroyed during the war on Terrorism,TOT,permanently,people would adjust their C,S would not decrease as much,(or even goes back to its initial level),CA deficit may disappear finally,33,Factors affecting CA-Small Open Economy,Financing for temporary shocks,adjusting for persistent(permanent)shocks,-IMF Compensatory Financing Facility(CFF),A country could ask for loans when its income from exports is insufficient and the insufficient is temporary.,34,Factors affecting CA-Small Open Economy,Influence of home expansionary fiscal policies,Gor T,S,I unchanged,(S-I),NFI&NX(CA0),r,S,I,I,S,E,IS=S,CAI,CA0,37,Large Country,Can be considered as the case between SOE and closed economy,r*will be partially driven toward the direction that r changes,38,Large Country,E.g.Drought(temporary production shock),Y,S,r tends to,$flows in(NFI,),r*,CA,but smaller than SOE,r,S,I,I,S,E,SI=I,CA0,SSII,CA0,39,Large Country,G or T(Twin deficit in the U.S.),40,S&I Shocks,CA,r*-,CA,r*-,CA-,r,CA-,r,CA,r ，r*,CA,r ，r*,41,