International Economics 国际经济学 Lectured by Yuanfen Tu School of International Trade and Economics Email:jxnctyf@126.com

International Economics By Robert J. Carbaugh 13th Edition Chapter 7: Macroeconomic Policy in an Open Economy

Introduction Government policies designed to achieve full employment with price stability and equilibrium in the BOP The importance of international economic-policy cooperation

Economic Objectives of Nations Objectives of macroeconomic policy Internal balance External balance Long-term economic growth Reasonably equitable distribution of national income 4

Economic Objectives of Nations Internal balance Economic stability at full employment A fully employed economy No inflation External balance When it realizes neither deficits nor surpluses in its current account Overall balance Internal balance and external balance 5

Policy Instruments Expenditure-changing policies Alter the level of total spending (aggregate demand) for goods and services Produced domestically and imported Fiscal policy Changes in government spending and taxes Monetary policy Changes in the money supply and interest rates Central bank 6

Policy Instruments Expenditure-switching policies Modify the direction of demand Shifting it between domestic output and imports Under fixed exchange rates and trade deficit Devalue its currency Under managed floating exchange-rate and to increase its competitiveness Depreciate its currency 7

Policy Instruments Direct controls Government restrictions on the market economy To control particular items in the current account To restrain capital outflows To stimulate capital inflows 8

Aggregate Demand and Aggregate Supply Aggregate demand-aggregate supply model Aggregate demand curve (AD) Level of real output (real GDP) purchased at alternative price levels during a given year Spending by domestic consumers, by businesses, by government, and by foreign buyers (net exports) As the price level falls The quantity of real output demanded increases 9

Aggregate Demand and Aggregate Supply Aggregate demand-aggregate supply model Aggregate supply curve (AS) Relation between the level of prices and amount of real output that will be produced by the economy during a given year Upward sloping Per-unit production costs and prices increase as real output increases Equilibrium: AD = AS 10

Aggregate Demand and Aggregate Supply Shifts in aggregate demand curve Changes in the determinants of AD Consumption, investment, government purchases, or net exports Shifts in the aggregate supply curve Changes in the price of resources, technology, business expectations 11

Macroeconomic equilibrium: the aggregate demand-aggregate supply model FIGURE 7.1 Macroeconomic equilibrium: the aggregate demand-aggregate supply model The economy is in equilibrium where the aggregate demand curve intersects the aggregate supply curve. This intersection determines the equilibrium price level and output for the economy. Increases (decreases) in aggregate demand or aggregate supply result in rightward (leftward) shifts in these curves. 12

Monetary and fiscal policy respond to financial turmoil in the economy 2008-2009 recession Federal Reserve Lowering the federal funds rate target to virtually zero Expanded its role as lender of last resort Credit to banks and other financial institutions as well as businesses 13

Monetary and fiscal policy respond to financial turmoil in the economy 2008-2009 recession U.S. government – Economic Stimulus Act of 2008 $113 billion (0.8% of GDP) – one-time tax rebates to lower- and middle-income individuals and households To be spent immediately Hoping to increase the aggregate demand Only 10-20% of the tax rebate dollars were spent The rest: household saving or for paying down past debt 14

Monetary and fiscal policy respond to financial turmoil in the economy 2009, Barack Obama Fiscal stimulus program of $789 billion $507 billion in spending programs $282 billion in tax relief Designed to increase the aggregate demand 15

Monetary and Fiscal Policy in a Closed Economy If aggregate output is too low and unemployment is too high Government - increase aggregate demand for real output Expansionary monetary or fiscal policies Increase in the country’s real GDP 16

Monetary and Fiscal Policy in a Closed Economy If inflation is troublesome Government - reduce the level of aggregate demand for real output Contractionary monetary or fiscal policy Upward pressure on prices is softened and inflation moderates Expansionary monetary or fiscal policy Increase in aggregate demand Increase in domestic consumption, investment, or government spending 17

FIGURE 7.2 Effect of an expansionary monetary or fiscal policy on equilibrium real GDP (a) (a) Expansionary monetary or fiscal policy in a closed economy. 18

Monetary and Fiscal Policy in an Open Economy Expansionary monetary or fiscal policy Initial effect: Increase in aggregate demand Increase in domestic consumption, investment, or government spending Secondary effect: Increase or decrease in aggregate demand Changing net exports and other determinants of aggregate demand 19

Monetary and Fiscal Policy in an Open Economy If the initial and secondary effects - increases in aggregate demand Strengthened effect of expansionary policy If the initial and secondary effects - conflicting impacts Weakened effect 20

Monetary and Fiscal Policy in an Open Economy Expansionary fiscal policy; fixed exchange rates Initial effect: Increase aggregate demand Secondary effect: Increase aggregate demand Budget deficit; Higher interest rate Increased demand for domestic currency in foreign-currency market Purchase foreign currency with domestic currency Increase in the domestic money supply Increase the amount of loanable funds Fiscal policy - strengthened under fixed exchange rates 21

FIGURE 7.2 Effect of an expansionary monetary or fiscal policy on equilibrium real GDP (b) (b) Expansionary monetary policy or fiscal policy in an open economy. (1) The policy’s initial and secondary effects reinforce each other. (2) The policy’s initial and secondary effects conflict with each other. 22

Monetary and Fiscal Policy in an Open Economy Expansionary monetary policy; fixed exchange rates Initial effect: Increase aggregate demand Reduce the domestic interest rate Increased consumption and investment Secondary effect: Reduce aggregate demand Decreasing demand for currency Purchase domestic currency with foreign currency Decrease in money supply and loanable funds Monetary policy - weakened under fixed exchange rates 23

Monetary and Fiscal Policy in an Open Economy Expansionary monetary policy; floating exchange rates Initial effect: Increase aggregate demand Reduce the domestic interest rate Increased consumption and investment Secondary effect: Increase aggregate demand Domestic currency depreciates Increase in exports, decrease in imports, improvement in current account Monetary policy – strengthened under floating exchange rates 24

FIGURE 7.2 Effect of an expansionary monetary or fiscal policy on equilibrium real GDP (b) (b) Expansionary monetary policy or fiscal policy in an open economy. (1) The policy’s initial and secondary effects reinforce each other. (2) The policy’s initial and secondary effects conflict with each other. 25

Monetary and Fiscal Policy in an Open Economy Expansionary fiscal policy; floating exchange rates Initial effect: Increase aggregate demand Secondary effect: Decrease aggregate demand Budget deficit; Higher interest rate Increased demand for domestic currency in the foreign-exchange market Domestic currency appreciates; Falling exports Rising imports, Deteriorating current account Fiscal policy – weakened, floating exchange rates 26

TABLE 7.1 The effectiveness of monetary and fiscal policy in promoting internal balance for an economy with a high degree of capital mobility Exchange-Rate Regime Monetary Policy Fiscal Policy Floating exchange rates Strengthened Weakened Fixed exchange rates 27

Does crowding occur in an open economy? Crowding out Increased government expenditures and the subsequent budget deficits Private consumption or investment spending decreasing Higher interest rates caused by budget deficits Government deficits Don’t necessarily squeeze out private spending 28

Does crowding occur in an open economy? Recessions People are not spending all of the available funds Consumers are saving more than businesses intend to invest Deficit-financed government spending doesn’t crowd out private spending Extent of crowding out Lessened in an open economy with capital flows Inflows of capital from abroad keep interest rates lower 29

Recession + current account deficit Macroeconomic Stability and the Current Account: Policy Agreement vs. Policy Conflict Recession + current account deficit Floating exchange rates Expansionary monetary policy to combat recession Currency depreciation Rise in exports and fall in imports Reduce the current account deficit A single economic policy promotes overall balance 30

Inflation + current account deficit Macroeconomic Stability and the Current Account: Policy Agreement vs. Policy Conflict Inflation + current account deficit Contractionary monetary policy to combat inflation Increase in domestic interest rate Currency appreciation Fall in exports and rise in imports Larger current-account deficit Policy conflict: monetary policy (or fiscal policy) alone will not restore both internal and external balance 31

Macroeconomic Stability and the Current Account: Policy Agreement vs Macroeconomic Stability and the Current Account: Policy Agreement vs. Policy Conflict 英国经济学家詹姆斯·米德于1951年在其名著《国际收支》中最早提出了固定汇率制下的内外均衡冲突问题。这被称为“米德冲突”，即在汇率固定不变时，政府只能主要运用影响社会总需求的政策来调节内外均衡，在开放经济运行的特定区间便会出现内外均衡难以兼顾的情形。在米德的分析中，内外均衡的冲突一般是指在固定汇率下，失业增加、经常账户逆差或通货膨胀、经常账户盈余这两种特定的内外经济状况组合。

Macroeconomic Stability and the Current Account: Policy Agreement vs Macroeconomic Stability and the Current Account: Policy Agreement vs. Policy Conflict 外部均衡 内部均衡 顺 差 逆 差 通货膨胀 扩张政策 紧缩政策 失业

Macroeconomic Stability and the Current Account: Policy Agreement vs Macroeconomic Stability and the Current Account: Policy Agreement vs. Policy Conflict 丁伯根法则(Tinbergen’s Rule,1952,荷兰经济学家)：指要实现 n个目标，至少需要有相互独立的n种政策工具。 说明： 利用一种政策来实现两个目标是很难成功的。非均衡点需要相应的政策搭配。

财政政策与货币政策的搭配 “蒙代尔搭配法则”（Mundell’s Assignment Rule）或“有效市场分类原则”或“有效市场搭配原则”：在固定汇率制下，财政政策和货币政策是两种独立的政策工具，只要适当地搭配使用，可以同时实现内外均衡。关键在于应把政策实施在它最具影响力大目标上，具体地说，就是财政政策作用在内部均衡上，货币政策作用在外部均衡上。

Inflation With Unemployment Internal balance cannot be achieved just by manipulating aggregate demand Reduce AD to decrease inflation Increase AD to decrease unemployment Overall balance - three separate targets Current-account equilibrium Full employment Price stability 36

Inflation with Unemployment Open economy macro policy Demand-pull inflation（需求拉动型） Internal balance as a single target that requires but one policy instrument Inflation with unemployment （成本推动型） A problem for the United States Wage and price controls Exchange-rate realignments: Depreciation of the dollar

International Economic-Policy Coordination Economic relations among nations Conflict Independence Integration Policy cooperation Officials from different nations meet to evaluate world economic conditions Policy coordination Formal agreement among nations to initiate particular policies 38

Relations among national governments FIGURE 7.3 Relations among national governments Relations among national governments can be visualized along a spectrum ranging from policy conflict to policy interdependence. Between these extremes are a variety of forms of cooperation and coordination. 39

World economy - out of balance with the U.S. G-20 agrees to cooperate on global economic policy: international policy coordination World economy - out of balance with the U.S. U.S. – most of the global current-account deficit China, Japan, and Germany – most of the global surplus United States Consumed more than it produced Invested more than it saved Borrowed from trading partners 40

2009, Group of 20 nations - The G-20 plan: G-20 agrees to cooperate on global economic policy: international policy coordination 2009, Group of 20 nations - The G-20 plan: Coordinate macroeconomic policies Foster balanced economic growth China and Japan - rely less on exports and more on domestic consumption The U.S. - curtail its budget deficit Europe - difficult structural reforms to increase business investment 41

G-20 agrees to cooperate on global economic policy: international policy coordination Members will need periodically to review each nation’s policies Act by moral suasion, not sanctions 42

International Economic-Policy Coordination Obstacles to successful policy coordination Some nations give higher priority to price stability, or to full employment, than others Some nations have a stronger legislature Or weaker trade unions, than others The party pendulums in different nations Shift with elections occurring in different years One nation may experience economic recession While another nation experiences rapid inflation 43

International Economic-Policy Coordination Plaza Agreement of 1985, G-5 The United States, Japan, Germany, Great Britain, and France Overvalued U.S. dollar Twin U.S. deficits (trade and federal budget) were too large 44

International Economic-Policy Coordination Plaza Agreement of 1985, G-5 Each country Specific pledges on macroeconomic policy Agreed to initiate coordinated sales of the dollar By 1986, dollar had dramatically depreciated Louvre Accord of 1987, G-5 New concern: uncontrolled dollar plunge Intervention policies – curbing the pace of the dollar’s depreciation Other macroeconomic adjustments 45

International Economic-Policy Coordination 2000, G-7 The United States, Canada, Japan, the United Kingdom, Germany, France, and Italy Coordinated purchases of the euro to boost its value From $0.84 per euro to more than $0.88 per euro Within two weeks following the intervention, the euro’s value slid to an all-time low 46

Plaza Agreement of 1985 and Louver Accord of 1987 Open economy macro policy 20世纪80年代初期，美国经济为“滞胀”所困扰。当时的里根政府实施供应学派减税计划刺激经济，同时美国中央银行通过高利率政策压低货币供应，抑制通货膨胀。“松财政、紧货币”的政策组合在缓解“滞胀”方面取得了一定功效，但同时也给美国经济带来了严重的潜在问题，突出表现在美国出现了高额的财政赤字和经常项目逆差，美国利率水平也明显高于当时大多数工业化国家。美国政府财政赤字占GDP的比例1980年为2.9%，1985年升高至5.2%；同期，美国经常项目赤字达1245亿美元，占GDP的3%；美国国内市场利率比发达国家平均高4个百分点左右。

Plaza Agreement of 1985 and Louver Accord of 1987 Open economy macro policy 这一时期，日本和西德的经济同样受到了“滞胀”的冲击，但由于这些国家正处于二战以后的经济复苏期，经济运行基本面相对好于美国。政府财政赤字大幅度减少，经常项目出现了较大盈余。日本政府财政赤字占GDP的比例，1980年为4.9%，1985年下降到1.4%；西德政府财政赤字1980年占GDP的2.8%，1985年下降到1.1%。日本和西德的国内平均存款利率也明显低于美国。

Plaza Agreement of 1985 and Louver Accord of 1987 Open economy macro policy 日、美、德等发达工业化国家宏观经济政策和经济运行绩效的差异，特别是美元的高利率政策，大量吸引了外资流入美国，促使美元汇率出现了较大幅度升值。80年代上半期，美元汇率平均升值72%，美元高汇率实际上已经潜藏着较高的投机泡沫。美元汇率升值、高额财政赤字和贸易逆差使美国国内就业压力增大，国民不满情绪滋长，贸易保护主义倾向上升。当时美国国内主导性意见认为，问题主要出在日本和西德，美国政府应当促使国际社会加强汇率协调，使美元对日元等非美元货币适度贬值。

Plaza Agreement of 1985 and Louver Accord of 1987 Open economy macro policy 另一方面，日本和西德经过二战以后40多年的发展，已经积聚了相当强的经济实力，两国政府都不愿意因为贸易摩擦而恶化同美国的关系，同时认为，日元和马克相对美元升值也有利于日元和马克的国际化，提升日本和西德的国际地位。日元相对美元升值符合国际社会协调生存的基本利益，受国际政治经济因素共同推动，可谓水到渠成。1985年9月，发达国家5国（即G5国家，包括美国、日本、西德、英国和法国）财长和中央银行行长在纽约广场大厦签署协议，一致同意通过国际“协作干预”，稳步有序推动日元对美元升值。这次会议签署的协议，史称“广场协议”。

Plaza Agreement of 1985 and Louver Accord of 1987 Open economy macro policy 按照“广场协议”约定，G5国家要通过加强国际间汇率“协作干预”，在两年半的时间内，促使美元对日元汇率由当时1美元兑换237日元升至1美元兑换120日元。当时影响国际外汇市场资本流动的因素还有各国间长期利率差，广场协议政策协调也涉及了这一领域。广场协议签订时，美国30年期长期国债利率为10.8%，美国放松金融政策后，到1986年夏已降至7.3%。期间，美国联邦储备银行四次下调联邦基金利率，由广场协议时的7.5%降至1986年8月的5.5%。

Plaza Agreement of 1985 and Louver Accord of 1987 Open economy macro policy 然而，日本金融调节保持了国内长期利率的基本稳定。日本长期国债利率广场协议时为5.8%左右，到1986年初仍然保持在这一水平。日美长期利率差不断缩小，减轻了资金流向美国的压力，加之G5国家在外汇市场加强“协作干预”，有效促进了美元贬值。1985年底，美元对日元汇率降为1美元兑换200日元，到1986年夏再降为1美元兑150日元。

Plaza Agreement of 1985 and Louver Accord of 1987 Open economy macro policy 广场协议之后，尽管美元对日元等非美元货币大幅度贬值，但由于美国政府未能采取有效措施改善自身财政状况，同时由于货币贬值存在“J曲线效应”，在广场协议之后两年多的时间里，美国对外贸易逆差不仅没有缩少，反而继续恶化。1987年，美国贸易赤字达1680亿美元，占GDP的3.6%，其中，3/4的赤字来自日本和西德的经常项目盈余。美国贸易收支状况恶化和外债的急剧增加，影响了外资向美国的流入，市场对美元信心下降，继续让美元贬值明显弊大于利，美国对日本和西德的贸易摩擦重又加剧。

Plaza Agreement of 1985 and Louver Accord of 1987 Open economy macro policy 同时，受日元和马克升值的影响，日本和西德外贸出口下滑，经济增长率出现下降。日本经济增长率从1985年4.2%下降到1986年的3.1%，西德经济增长率1985－1987年在2%左右徘徊。日本和西德对美国未能按广场协议有效削减财政赤字表示不满。此外，美元大幅度过快贬值也引起了国际外汇市场和世界经济的较大震荡，主要发达工业化国家明显感到要尽快阻止美元下滑，保持美元汇率基本稳定，这有利于世界各国共同发展。当时，美国可以选择提高国内利率的办法吸引国际资本流入，减缓美元过速贬值。但是由于担心这样会引起国内经济萧条，美国不愿意提高国内利率，而倒更希望日本和西德压低利率。

Plaza Agreement of 1985 and Louver Accord of 1987 Open economy macro policy 在美国主导下，为了稳定国际外汇市场，阻止美元汇率过多过快下滑，通过国际协调解决发达国家面临的政策难题，1987年2月，G7国家财长和中央银行行长在巴黎的卢浮宫达成协议，一致同意G7国家要在国内宏观政策和外汇市场干预两方面加强“紧密协调合作”，保持美元汇率在当时水平上的基本稳定。此次会议协议史称“卢浮宫协议”。

Plaza Agreement of 1985 and Louver Accord of 1987 Open economy macro policy 卢浮宫协议强调G7国家加强“紧密合作”对维护美元汇率稳定和世界经济协同发展的重要性，强调全球更加平衡的经济增长在促进国际间外汇收支平衡中具有中心作用，实际是指美国贸易伙伴加快经济增长有助于解决美国国际收支不平衡问题。协议主要约定包括：日本和西德等实施刺激内需计划，美国进一步削减财政赤字；G7国家加强外汇市场“干预协调”，秘密保持美元对日元和马克汇率的非正式浮动区，如果汇率波动超出预期目标5%，各国要加强合作干预等等。卢浮宫协议后，国际主要货币汇率在近两年多的时间里保持基本稳定，没有发生太大动荡。

国际收支平衡的BP曲线： X表示出口，M表示进口；AX表示金融资产流出，AM表示金融资产流入 i BP（e1) BP（e2) 出口的增加和自主性进口的减少都会使BP曲线向右移动； 本币贬值BP曲线向右移动。 Y

IS-LM-BP曲线与内外均衡 当BP曲线比LM曲线平坦，说明资金的国际流动对利率的变动更敏感，国际资本流动的利率弹性大于货币需求的利率弹性。当BP曲线比LM曲线更陡峭，可能因为资金的国际流动受到的限制比较多，资金的国际流动对利率的变动不敏感，国际资本流动的利率弹性小于货币需求的利率弹性。 IS LM BP i Y E Y1 i1

固定汇率制下的财政效果1 资本不流动下的财政政策效果 i BP LM1 扩张性的财政政策使IS曲线右移，收入提高至Y1，进口增加，国际收支逆差。固定汇率制下外汇储备减少，LM曲线左移，收入减少，均衡时产出水平仍为Y0。 LM0 IS1 IS0 Y Y0 Y1

固定汇率制下的财政效果2 资本完全流动下的财政政策效果 i 扩张性的财政政策使IS曲线右移，利率提高，资本内流，资本账户下的顺差超过收入提高导致的经常账户下的逆差，国际收支顺差，固定汇率制下外汇储备增加，LM曲线右移，收入由Y0上升至Y1。 LM0 LM1 BP IS1 IS0 Y Y0 Y1

固定汇率制下的财政效果3 资本不完全流动下的财政政策效果 扩张性的财政政策使IS曲线右移，利率提高，资本内流，资本账户下的顺差超过收入提高导致的经常账户下的逆差，国际收支顺差，固定汇率制下外汇储备增加，LM曲线右移，收入由Y0上升至Y1。 i LM0 LM1 BP IS1 IS0 Y 资本流动性越强，固定汇率制下的财政政策越有效。 Y0 Y1

固定汇率制下的货币效果1 资本不流动下的货币政策效果 i BP 扩张性的货币政策使LM曲线右移，收入提高至Y1，进口增加，国际收支逆差。固定汇率制下外汇储备减少，LM曲线左移，收入减少，均衡时产出水平仍为Y0。 LM0 LM1 IS0 Y Y0 Y1

固定汇率制下的货币效果2 资本完全流动下的货币政策效果 i 扩张性的货币政策使LM曲线右移，利率降低，资本外流，资本账户下的逆差加上收入提高导致的经常账户下的逆差，国际收支逆差，固定汇率制下外汇储备减少，LM曲线左移，收入由Y1回移至Y0 。 LM0 LM1 BP IS0 固定汇率制下，单纯的货币政策总是无效。 Y Y0

浮动汇率制下的财政政策效果1 资本不流动时的财政政策效果 i BP1 BP0 扩张性的财政政策使IS曲线右移，收入提高至Y1，进口增加，国际收支逆差。浮动汇率制下本币贬值，IS和BP曲线右移，收入增加，均衡时产出水平进一步上升为Y2。 LM0 IS2 IS1 IS0 Y Y0 Y1 Y2

浮动汇率制下的财政效果2 资本完全流动下的财政政策效果 扩张性的财政政策使IS曲线右移，利率提高，资本内流，资本账户下的顺差超过收入提高导致的经常账户下的逆差，国际收支顺差，浮动汇率制下本币升值，IS曲线左移，收入由Y1 下降回至Y0 。 i LM0 BP IS1 IS0 Y Y0 Y1 随着资本流动性增强，财政政策的效果减弱。当资本完全流动时，财政政策完全无效。

浮动汇率制下的货币政策效果1 资本不流动下的货币政策效果 i BP1 BP2 扩张性的货币政策使LM曲线右移，收入提高至Y1，进口增加，国际收支逆差。浮动汇率制下本币贬值，IS和BP曲线右移，收入由Y0增加至Y1。 LM0 LM1 IS1 IS0 Y Y0 Y1

浮动汇率制下的货币政策效果2 资本完全流动下的货币政策效果 i 扩张性的货币政策使LM曲线右移，利率降低，资本外流，国际收支逆差，浮动汇率制下本币贬值，IS曲线右移，收入由Y0上升至Y1。 随着资本流动性增强，货币政策的效果增强。当资本完全流动时，货币政策效果最明显 LM0 LM1 BP IS1 IS0 Y Y0 Y1