Download Open-Economy Macroeconomics: Basic Concepts

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2007Thomson
Thomson
South-Western
© 2007
South-Western
Open-Economy Macroeconomics:
Basic Concepts
• Open and Closed Economies
– A closed economy (封閉經濟)is one that does not
interact with other economies in the world.
• There are no exports, no imports, and no capital flows.
– An open economy(開放經濟) is one that interacts
freely with other economies around the world.
© 2007 Thomson South-Western
Open-Economy Macroeconomics: Basic
Concepts
• An open economy interacts with other
countries in two ways.
– It buys and sells goods and services in world
product markets.
– It buys and sells capital assets in world financial
markets.
© 2007 Thomson South-Western
THE INTERNATIONAL FLOW
OF GOODS AND CAPITAL
• The Flow of Goods: Exports, Imports, and Net
Exports
– The United States is a very large and open
economy—it imports and exports huge quantities
of goods and services.
– Taiwan is a small and very open economy-it
exports and imports large quantities of goods and
services.
– Over the past four decades, international trade and
finance have become increasingly important.
© 2007 Thomson South-Western
The Flow of Goods: Exports,
Imports, Net Exports
• Exports are goods and services that are
produced domestically and sold abroad.
• Imports are goods and services that are
produced abroad and sold domestically.
• Net exports (NX) are the value of a nation’s
exports minus the value of its imports.
• Net exports are also called the trade
balance(貿易餘額).
© 2007 Thomson South-Western
The Flow of Goods: Exports,
Imports, Net Exports
• A trade deficit(貿易赤字) is a situation in
which net exports (NX) are negative.
– Imports > Exports
• A trade surplus (貿易盈餘)is a situation in
which net exports (NX) are positive.
– Exports > Imports
• Balanced trade refers to when net exports are
zero—exports and imports are exactly equal.
© 2007 Thomson South-Western
The Flow of Goods: Exports,
Imports, Net Exports
• Factors That Affect Net Exports
– 偏好：The tastes of consumers for domestic and
foreign goods and services.
– 國內外商品價格：The prices of goods at home
and abroad.
– 匯率：The exchange rates at which people can use
domestic currency to buy foreign currencies.
© 2007 Thomson South-Western
The Flow of Goods: Exports,
Imports, Net Exports
• Factors That Affect Net Exports (continued)
– 所得購買力：The incomes of consumers at home
and abroad.
– 運輸成本：The costs of transporting goods across
border.
– 貿易政策：The policies of the government toward
international trade.
© 2007 Thomson South-Western
The Internationalization of the U.S. Economy
Percent
of GDP
15
Imports
10
Exports
5
0
1950 1955
1960 1965 1970 1975 1980 1985 1990 1995 2000
2005
© 2007 Thomson South-Western
1960~2008年 台灣經濟國際化程度
佔GDP%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
出口
20.00%
進口
10.00%
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
© 2007 Thomson South-Western
年
The Flow of Financial Resources:
Net Capital Outflow
• Net capital outflow (淨資本流出，NCO)
refers to the purchase of foreign assets by
domestic residents minus the purchase of
domestic assets by foreigners.
• When a Taiwan resident buys stock in Intel,
the purchase raises Taiwan net capital outflow.
• When a Japanese residents buys a bond issued
by the Taiwan’s government, the purchase
reduces the Taiwan’s net capital outflow.
© 2007 Thomson South-Western
The Flow of Financial Resources:
Net Capital Outflow
• Variables that Influence Net Capital Outflow
– 國內實質利率： The real interest rates being paid
on foreign assets.
– 國外實質利率：The real interest rates being paid
on domestic assets.
– 國外政經風險：The perceived economic and
political risks of holding assets abroad.
– 政府政策：The government policies that affect
foreign ownership of domestic assets.
© 2007 Thomson South-Western
Saving, Investment, and Their Relationship to
the International Flows
• Net exports is a component of GDP:
Y = C + I + G + NX
• National saving is the income of the nation that is left after
paying for current consumption and government purchases:
Y – C – G = I + NX
• National saving (S) equals Y – C – G, so:
S = I + NX
• In a closed economy, NX=0 and hence:
S=I
© 2007 Thomson South-Western
The Equality of Net Exports and Net
Capital Outflow
• For an economy as a whole, NX and NCO must
balance each other so that:
NCO = NX
• This holds true because every transaction that
affects one side of this equation also affects the
other side by exactly the same amount.
© 2007 Thomson South-Western
The Equality of Net Exports and Net
Capital outflow
• Imagine that you are a sales person residing in
Taiwan. One day, you sell ten bikes to a U.S.
customer for 10,000 U.S. dollars.
• This sale is an export of Taiwan, so it increases
Taiwan net exports by 10,000 U.S. dollars.
• If you decide to use the proceeds to purchase
the INTEL stock. Then you, as a domestic
resident, purchase and own foreign assets.
© 2007 Thomson South-Western
The Equality of Net Exports and Net
Capital outflow
• The purchase of INTEL stock increases Taiwan net
capital outflow by 10,000 U.S. dollars.
• If you use 10,000 U.S. dollars to a good made in U.S.,
then Taiwan imports will increase by 10,000 U.S.
dollars. And the net capital flow does not change.
• If you go to a local bank to exchange 10,000 U.S.
dollars for N.T. dollars. But this does not change the
situation because the bank has to do something with
the 10,000 U.S. dollars.
© 2007 Thomson South-Western
International Flows of Goods and Capital:
Summary
© 2007 Thomson South-Western
National Saving, Domestic Investment, and Net
Foreign Investment
(a) National Saving and Domestic Investment (as a percentage of GDP)
Percent
of GDP
20
Domestic investment
18
16
14
National saving
12
10
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
© 2007 Thomson South-Western
National Saving, Domestic Investment, and Net
Foreign Investment
(b) Net Capital Outflow (as a percentage of GDP)
Percent
of GDP
2
Net capital
outflow
1
0
1
2
3
4
5
6
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
© 2007 Thomson South-Western
1960~2008年 台灣國民儲蓄及國內投資佔GDP比率
佔GDP%
40.00%
30.00%
20.00%
國民儲蓄
國內投資
10.00%
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
© 2007 Thomson South-Western
年
1960~2008年 台灣淨出口佔GDP比率
佔GDP%
20.00%
15.00%
10.00%
5.00%
0.00%
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
年
-5.00%
淨出口
-10.00%
© 2007 Thomson South-Western
THE PRICES FOR INTERNATIONAL TRANSACTIONS:
REAL AND NOMINAL EXCHANGE RATES
• International transactions are influenced by
international prices.
• The two most important international prices
are the nominal exchange rate(各目匯率) and
the real exchange rate(實質匯率).
© 2007 Thomson South-Western
Nominal Exchange Rates
• The nominal exchange rate is the rate at which
a person can trade the currency of one country
for the currency of another.
© 2007 Thomson South-Western
Nominal Exchange Rates
• The nominal exchange rate is expressed in two ways:
– In units of foreign currency per one N.T. dollar.
– In units of N.T. dollars per one unit of the foreign
currency.
• Assume the exchange rate between the N.T. dollar
and U.S. dollar is 33 N.T. dollars to one U.S. dollar.
– One U.S. dollar trades for 33 N.T. dollars.
– One N.T. dollar trades for 1/33 (= 0.0303) of a U.S.
dollar.
© 2007 Thomson South-Western
Nominal Exchange Rates
• Appreciation (貨幣升值) refers to an increase in the
value of a currency as measured by the amount of
foreign currency it can buy.
• Depreciation (貨幣貶值) refers to a decrease in the
value of a currency as measured by the amount of
foreign currency it can buy.
• If one N.T. dollar buys more foreign currency, there
is an appreciation of the N.T. dollar.
• If it buys less there is a depreciation of the N.T. dollar.
© 2007 Thomson South-Western
Real Exchange Rates
• The real exchange rate is the rate at which a
person can trade one basket of the goods and
services of one country for units of the same
basket of the goods and services of another
country.
© 2007 Thomson South-Western
Real Exchange Rates
• The real exchange rate compares the prices of
domestic goods and foreign goods in the domestic
economy.
• If a case of German beer is twice as expensive as
American beer, the real exchange rate is 1/2 case of
German beer per case of American beer.
• The real exchange rate depends on the nominal
exchange rate and the prices of goods in the two
countries measured in local currencies.
© 2007 Thomson South-Western
Real Exchange Rates
• The real exchange rate is a key determinant of
how much a country exports and imports.
Real exchange rate =
Nominal exchange rate Domestic price
Foreign price
© 2007 Thomson South-Western
Real Exchange Rates
• A depreciation (fall) in the Taiwan real
exchange rate means that Taiwan goods have
become cheaper relative to foreign goods.
• This encourages consumers both at home and
abroad to buy more Taiwan goods and fewer
goods from other countries.
© 2007 Thomson South-Western
Real Exchange Rates
• As a result, Taiwan exports rise, and Taiwan
imports fall, and both of these changes raise
Taiwan net exports.
• Conversely, an appreciation in the Taiwan real
exchange rate means that Taiwan goods have
become more expensive compared to foreign
goods, so Taiwan net exports fall.
© 2007 Thomson South-Western
A FIRST THEORY OF
EXCHANGE-RATE DETERMINATION:
PURCHASING-POWER PARITY
• The purchasing-power parity theory(購買力平價稅)
is the simplest and most widely accepted theory
explaining the variation of currency exchange rates.
• Purchasing-power parity is a theory of exchange rates
whereby a unit of any given currency should be able
to buy the same quantity of goods in all countries.
© 2007 Thomson South-Western
The Basic Logic of Purchasing-Power Parity
• According to the purchasing-power parity theory, a unit of any
given currency should be able to buy the same quantity of
goods in all countries.
• The theory of purchasing-power parity is based on a principle
called the law of one price.
• According to the law of one price, a good must sell for the
same price in all locations.
• If the law of one price were not true, unexploited profit
opportunities would exist.
• The process of taking advantage of differences in prices in
different markets is called arbitrage.
© 2007 Thomson South-Western
The Basic Logic of Purchasing-Power Parity
• If arbitrage occurs, eventually prices that differed in
two markets would necessarily converge.
• According to the theory of purchasing-power parity, a
currency must have the same purchasing power in all
countries and exchange rates move to ensure that
Nominal exchange rate  Domestic price
1
Foreign price
© 2007 Thomson South-Western
Implications of Purchasing-Power Parity
• If the purchasing power of the dollar is always
the same at home and abroad, then the
exchange rate cannot change.
• The nominal exchange rate between the
currencies of two countries must reflect the
different price levels in those countries.
Foreign price
Nominal exchange rate =
Domestic price
© 2007 Thomson South-Western
Implications of Purchasing-Power Parity
• When the central bank prints large quantities
of money, the money loses value both in terms
of the goods and services it can buy and in
terms of the amount of other currencies it can
buy.
© 2007 Thomson South-Western
Money, Prices, and the Nominal Exchange Rate During the
German Hyperinflation
Indexes
(Jan. 1921 = 100)
1,000,000,000,000,000
Money supply
10,000,000,000
Price level
100,000
1
Exchange rate
.00001
.0000000001
1921
1922
1923
1924
1925
© 2007 Thomson South-Western
Limitations of Purchasing-Power Parity
• Many goods are not easily traded or shipped
from one country to another.
• Tradable goods are not always perfect
substitutes when they are produced in different
countries.
© 2007 Thomson South-Western
全球化對工作機會與薪資所得的影響
1. 八○年代中期以前，經濟、出口與薪資所得同步
成長，但九○年代以後，薪資所得成長遠遠落後
於經濟成長與出口成長
2. 九○年代開始，資金與技術跨國移動障礙一一移
除。台商赴中國投資、生產等同於「台商以中國
勞工取代台灣勞工」的跨國勞動替代現象，導致
台灣製造業及服務業薪資所得不成長，勞資雙方
議價能力出現不對稱現象。
© 2007 Thomson South-Western
2000年後台灣對中國貿易（出口）依存度快速增加
(1992-2008)
30%
出口依存度
貿易依存度
25%
20%
15%
10%
5%
0%
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
© 2007 Thomson South-Western
2000年後台商投資中國金額占我國GDP比重持續上升
3%
3%
2%
2%
1%
1%
0%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
© 2007 Thomson South-Western
我國對外投資以投資中國比重最高
中國
香港
英屬加
日本
美國
歐洲
勒比海
1995
44.61
4.06
15.11
0.36
10.13
2.44
1999
27.71
2.22
30.06
2.70
9.84
1.82
2000
33.93
0.62
29.26
4.06
11.21
1.63
2001
38.80
1.32
23.60
2.36
15.23
0.65
2002
53.38
2.31
21.79
0.33
7.99
2.14
2003
53.66
7.49
23.32
1.17
5.45
0.90
2004
67.24
1.35
11.19
1.45
5.40
0.60
2005
71.05
1.27
14.92
0.50
3.72
3.54
2006
63.91
2.27
15.24
0.09
4.05
3.88
2007
60.62
1.15
9.61
0.11
8.19
2.55
2008
55.83
2.27
16.23
0.87
7.88
1.93
© 2007 Thomson South-Western
各國對中國投資占其對外投資比重
臺灣
南韓
日本
2000
2001
2002
33.93%
38.80%
53.38%
12.22%
11.29%
24.55%
2.04%
4.64%
4.88%
2003
2004
2005
53.66%
67.24%
33.22%
38.37%
8.59%
12.96%
71.05%
—
—
© 2007 Thomson South-Western
2000年後，出口再度成為台灣經濟成長的主要動力
出口/GDP
0.7
0.65
0.6
0.55
0.5
0.45
0.4
0.35
0.3
0.25
0.2
1970
1976
1982
1988
1994
2000
2006
© 2007 Thomson South-Western
2000年後，淨出口成為台灣經濟成長最重要
的源泉
7
6
5
4
3
2
1
0
65-69
70-74
75-79
80-84
85-89
90-94
95-99
00-04
存貨增加
淨輸出
05--08
-1
-2
民間最終消 費
政府最終消 費
固定資本形成毛額
© 2007 Thomson South-Western
經濟成長未能反映在家庭可支配所得成長
家庭可支配所得年成長率
Year
第一分位組 第二分位組 第三分位組 第四分位組 第五分位組
總平均
GDP per
capita
2000
-0.58
-0.44
0.01
1.15
0.25
0.27
3.24
2001
-11.35
-8.15
-4.95
-2.88
2.11
-2.56
-2.37
2002
4.55
2.63
0.52
-0.81
0.79
0.84
3.82
2003
1.43
1.28
0.18
1.60
0.01
0.66
1.75
2004
0.34
1.83
4.09
1.43
-0.46
1.09
4.81
2005
0.13
0.12
0.43
0.69
0.28
0.37
3.16
2006
2.21
1.57
2.10
2.91
1.70
2.07
3.40
2007
2.59
1.11
0.50
-0.34
2.16
1.20
5.61
平均
-0.09
-0.01
0.36
0.47
0.85
0.49
2.93
© 2007 Thomson South-Western
每戶就業人數隨可支配所得而下降
Year
第一分位組 第二分位組 第三分位組 第四分位組 第五分位組
2000
0.68
1.29
1.59
1.94
2.41
2001
0.66
1.23
1.62
1.96
2.35
2002
0.7
1.25
1.62
1.98
2.32
2003
0.62
1.2
1.59
1.94
2.35
2004
0.6
1.21
1.59
1.93
2.34
2005
0.56
1.18
1.56
1.92
2.31
2006
0.59
1.19
1.59
1.9
2.32
2007
0.6
1.14
1.56
1.93
2.29
平均
0.63
1.21
1.59
1.94
2.34
© 2007 Thomson South-Western
家庭儲蓄能力隨可支配所得而下降
Year
第一分位組 第二分位組 第三分位組 第四分位組 第五分位組
2000
14733
68572
143820
262601
653888
2001
-4516
44315
110623
220922
682548
2002
-10302
37871
96355
201210
691365
2003
1652
54328
94783
218342
707347
2004
1829
42208
97299
204757
646909
2005
-1948
39360
90494
181829
657753
2006
183
40032
92770
213067
654288
2007
-1164
40711
99720
201380
698251
平均
58
45924
103233
213013
674043
© 2007 Thomson South-Western
Summary
• Net exports are the value of domestic goods
and services sold abroad minus the value of
foreign goods and services sold domestically.
• Net capital outflow is the acquisition of
foreign assets by domestic residents minus the
acquisition of domestic assets by foreigners.
© 2007 Thomson South-Western
Summary
• An economy’s net capital outflow always
equals its net exports.
• An economy’s saving can be used to either
finance investment at home or to buy assets
abroad.
© 2007 Thomson South-Western
Summary
• The nominal exchange rate is the relative price
of the currency of two countries.
• The real exchange rate is the relative price of
the goods and services of two countries.
© 2007 Thomson South-Western
Summary
• When the nominal exchange rate changes so
that each dollar buys more foreign currency,
the dollar is said to appreciate or strengthen.
• When the nominal exchange rate changes so
that each dollar buys less foreign currency, the
dollar is said to depreciate or weaken.
© 2007 Thomson South-Western
Summary
• According to the theory of purchasing-power
parity, a unit of currency should buy the same
quantity of goods in all countries.
• The nominal exchange rate between the
currencies of two countries should reflect the
countries’ price levels in those countries.
© 2007 Thomson South-Western