ch18-Organization-克鲁格曼-课件.ppt

1、Slide 18-1Copyright 2003 Pearson Education,Inc.Chapter OrganizationMacroeconomic Policy Goals in an Open EconomyInternational Macroeconomic Policy Under the Gold Standard,1870-1914The Interwar Years,1918-1939The Bretton Woods System and the International Monetary FundInternal and External Balance Un

2、der the Bretton Woods SystemAnalyzing Policy Options Under the Bretton Woods SystemSlide 18-2Copyright 2003 Pearson Education,Inc.The External Balance Problem of the United StatesWorldwide Inflation and the Transition to Floating RatesSummaryChapter OrganizationSlide 18-3Copyright 2003 Pearson Educa

3、tion,Inc.IntroductionThe interdependence of open national economies has made it more difficult for governments to achieve full employment and price stability.The channels of interdependence depend on the monetary and exchange rate arrangements.This chapter examines the evolution of the international

4、 monetary system and how it influenced macroeconomic policy.Slide 18-4Copyright 2003 Pearson Education,Inc.Macroeconomic Policy Goals in an Open EconomyIn open economies,policymakers are motivated by two goals:Internal balance It requires the full employment of a countrys resources and domestic pric

5、e level stability.External balance It is attained when a countrys current account is neither so deeply in deficit nor so strongly in surplus.Slide 18-5Copyright 2003 Pearson Education,Inc.Internal Balance:Full Employment and Price-Level StabilityUnder-and overemployment lead to price level movements

6、 that reduce the economys efficiency.To avoid price-level instability,the government must:Prevent substantial movements in aggregate demand relative to its full-employment level.Ensure that the domestic money supply does not grow too quickly or too slowly.Macroeconomic Policy Goals in an Open Econom

7、ySlide 18-6Copyright 2003 Pearson Education,Inc.Macroeconomic Policy Goals in an Open EconomyExternal Balance:The Optimal Level of the Current AccountExternal balance has no full employment or stable prices to apply to an economys external transactions.An economys trade can cause macroeconomic probl

8、ems depending on several factors:The economys particular circumstances Conditions in the outside world The institutional arrangements governing its economic relations with foreign countriesSlide 18-7Copyright 2003 Pearson Education,Inc.Problems with Excessive Current Account Deficits:They sometimes

9、represent temporarily high consumption resulting from misguided government policies.They can undermine foreign investors confidence and contribute to a lending crisis.Macroeconomic Policy Goals in an Open EconomySlide 18-8Copyright 2003 Pearson Education,Inc.Macroeconomic Policy Goals in an Open Eco

10、nomyProblems with Excessive Current Account Surpluses:They imply lower investment in domestic plant and equipment.They can create potential problems for creditors to collect their money.They may be inconvenient for political reasons.Slide 18-9Copyright 2003 Pearson Education,Inc.Several factors migh

11、t lead policymakers to prefer that domestic saving be devoted to higher levels of domestic investment and lower levels of foreign investment:It may be easier to tax It may reduce domestic unemployment.It can have beneficial technological spillover effectsMacroeconomic Policy Goals in an Open Economy

12、Slide 18-10Copyright 2003 Pearson Education,Inc.International Macroeconomic Policy Under the Gold Standard,1870-1914Origins of the Gold StandardThe gold standard had its origin in the use of gold coins as a medium of exchange,unit of account,and store of value.The Resumption Act(1819)marks the first

13、 adoption of a true gold standard.It simultaneously repealed long-standing restrictions on the export of gold coins and bullion from Britain.The U.S.Gold Standard Act of 1900 institutionalized the dollar-gold link.Slide 18-11Copyright 2003 Pearson Education,Inc.International Macroeconomic Policy Und

14、er the Gold Standard,1870-1914External Balance Under the Gold StandardCentral banks Their primary responsibility was to preserve the official parity between their currency and gold.They adopted policies that pushed the nonreserve component of the financial account surplus(or deficit)into line with t

15、he total current plus capital account deficit(or surplus).A country is in balance of payments equilibrium when the sum of its current,capital,and nonreserve financial accounts equals zero.Many governments took a laissez-faire attitude toward the current account.Slide 18-12Copyright 2003 Pearson Educ

16、ation,Inc.International Macroeconomic Policy Under the Gold Standard,1870-1914The Price-Specie-Flow MechanismThe most important powerful automatic mechanism that contributes to the simultaneous achievement of balance of payments equilibrium by all countries The flows of gold accompanying deficits an

17、d surpluses cause price changes that reduce current account imbalances and return all countries to external balance The mint parity The point of gold export or import.Slide 18-13Copyright 2003 Pearson Education,Inc.The Price-Specie-Flow MechanismCA deficit Emint parity,if over the point of gold expo

18、rt gold outflow M P CA mint parity the point of gold export or import Slide 18-14Copyright 2003 Pearson Education,Inc.International Macroeconomic Policy Under the Gold Standard,1870-1914The Gold Standard“Rules of the Game”:Myth and RealityThe practices of selling(or buying)domestic assets in the fac

19、e of a deficit(or surplus).The efficiency of the automatic adjustment processes inherent in the gold standard increased by these rules.In practice,there was little incentive for countries with expanding gold reserves to follow these rules.Countries often reversed the rules and sterilized gold flows.

20、Slide 18-15Copyright 2003 Pearson Education,Inc.Internal Balance Under the Gold StandardThe gold standard systems performance in maintaining internal balance was mixed.Example:The U.S.unemployment rate averaged 6.8%between 1890 and 1913,but it averaged under 5.7%between 1946 and 1992.International M

21、acroeconomic Policy Under the Gold Standard,1870-1914Slide 18-16Copyright 2003 Pearson Education,Inc.The Interwar Years,1918-1939With the eruption of WWI in 1914,the gold standard was suspended.The interwar years were marked by severe economic instability.The reparation payments led to episodes of h

22、yperinflation in Europe.The German HyperinflationGermanys price index rose from a level of 262 in January 1919 to a level of 126,160,000,000,000 in December 1923(a factor of 481.5 billion).Slide 18-17Copyright 2003 Pearson Education,Inc.The Fleeting Return to Gold1919 U.S.returned to gold1922 A grou

23、p of countries(Britain,France,Italy,and Japan)agreed on a program calling for a general return to the gold standard and cooperation among central banks in attaining external and internal objectives.The Interwar Years,1918-1939Slide 18-18Copyright 2003 Pearson Education,Inc.1925 Britain returned to t

24、he gold standard1929 The Great Depression was followed by bank failures throughout the world.1931 Britain was forced off gold when foreign holders of pounds lost confidence in Britains commitment to maintain its currencys value.The Interwar Years,1918-1939Slide 18-19Copyright 2003 Pearson Education,

25、Inc.International Economic DisintegrationMany countries suffered during the Great Depression.Major economic harm was done by restrictions on international trade and payments.These beggar-thy-neighbor policies provoked foreign retaliation and led to the disintegration of the world economy.All countri

26、es situations could have been bettered through international cooperation Bretton Woods agreementThe Interwar Years,1918-1939Slide 18-20Copyright 2003 Pearson Education,Inc.The Interwar Years,1918-1939 Figure 18-1:Industrial Production and Wholesale Price Index Changes,1929-1935Slide 18-21Copyright 2

27、003 Pearson Education,Inc.The Bretton Woods System and the International Monetary FundInternational Monetary Fund(IMF)In July 1944,44 representing countries met in Bretton Woods,New Hampshire to set up a system of fixed exchange rates.All currencies had fixed exchange rates against the U.S.dollar an

28、d an unvarying dollar price of gold($35 an ounce).It intended to provide lending to countries with current account deficits.It called for currency convertibility.Slide 18-22Copyright 2003 Pearson Education,Inc.Goals and Structure of the IMFThe IMF agreement tried to incorporate sufficient flexibilit

29、y to allow countries to attain external balance without sacrificing internal objectives or fixed exchange rates.Two major features of the IMF Articles of Agreement helped promote this flexibility in external adjustment:IMF lending facilities IMF conditionality is the name for the surveillance over t

30、he policies of member counties who are heavy borrowers of Fund resources.Adjustable paritiesThe Bretton Woods System and the International Monetary FundSlide 18-23Copyright 2003 Pearson Education,Inc.ConvertibilityConvertible currency A currency that may be freely exchanged for foreign currencies.Ex

31、ample:The U.S.and Canadian dollars became convertible in 1945.A Canadian resident who acquired U.S.dollars could use them to make purchases in the U.S.or could sell them to the Bank of Canada.The IMF articles called for convertibility on current account transactions only.The Bretton Woods System and

32、 the International Monetary FundSlide 18-24Copyright 2003 Pearson Education,Inc.Internal and External Balance Under the Bretton Woods SystemThe Changing Meaning of External BalanceThe“Dollar shortage”period(first decade of the Bretton Woods system)The main external problem was to acquire enough doll

33、ars to finance necessary purchases from the U.S.Marshall Plan(1948)A program of dollar grants from the U.S.to European countries.It helped limit the severity of dollar shortage.Slide 18-25Copyright 2003 Pearson Education,Inc.Internal and External Balance Under the Bretton Woods SystemSpeculative Cap

34、ital Flows and CrisesCurrent account deficits and surpluses took on added significance under the new conditions of increased private capital mobility.Countries with a large current account deficit might be suspected of being in“fundamental disequilibrium”under the IMF Articles of Agreement.Countries

35、 with large current account surpluses might be viewed by the market as candidates for revaluation.Slide 18-26Copyright 2003 Pearson Education,Inc.Analyzing Policy Options Under the Bretton Woods SystemTo describe the problem an individual country(other than the U.S.)faced in pursuing internal and ex

36、ternal balance under the Bretton Woods system of fixed exchange rates,assume that:R=R*Slide 18-27Copyright 2003 Pearson Education,Inc.Maintaining Internal BalanceIf both P*and E are permanently fixed,internal balance required only full employment.Investment is assumed constant.The condition of inter

37、nal balance:Yf=C(Yf T)+I+G+CA(EP*/P,Yf T)(18-1)The policy tools that affect aggregate demand and therefore affect output in the short run.Analyzing Policy Options Under the Bretton Woods SystemSlide 18-28Copyright 2003 Pearson Education,Inc.Figure 18-2:Internal Balance(II),External Balance(XX),and t

38、he “Four Zones of Economic Discomfort”Analyzing Policy Options Under the Bretton Woods SystemSlide 18-29Copyright 2003 Pearson Education,Inc.Maintaining External BalanceHow do policy tools affect the economys external balance?Assume the government has a target value,X,for the current account surplus

39、.External balance requires the government to manage fiscal policy and the exchange rate so that:CA(EP*/P,Y T)=X (18-2)To maintain its current account at X as it devalues the currency,the government must expand its purchases or lower taxes.Analyzing Policy Options Under the Bretton Woods SystemSlide

40、18-30Copyright 2003 Pearson Education,Inc.Expenditure-Changing and Expenditure-Switching PoliciesPoint 1(in Figure 18-2)shows the policy setting that places the economy in the position that the policymaker would prefer.Expenditure-changing policy The change in fiscal policy that moves the economy to

41、 Point 1.It alters the level of the economys total demand for goods and services.Analyzing Policy Options Under the Bretton Woods SystemSlide 18-31Copyright 2003 Pearson Education,Inc.Expenditure-switching policy The accompanying exchange rate adjustment It changes the direction of demand,shifting i

42、t between domestic output and imports.Both expenditure changing and expenditure switching are needed to reach internal and external balance.Analyzing Policy Options Under the Bretton Woods SystemSlide 18-32Copyright 2003 Pearson Education,Inc.Fiscal ease(G or T)Exchangerate,EXXII Figure 18-3:Policie

43、s to Bring About Internal and External Balance13Devaluation that results in internal and external balance24Fiscal expansion that results in internal and external balanceAnalyzing Policy Options Under the Bretton Woods SystemSlide 18-33Copyright 2003 Pearson Education,Inc.The External Balance Problem

44、 of the United StatesThe U.S.was responsible to hold the dollar price of gold at$35 an ounce and guarantee that foreign central banks could convert their dollar holdings into gold at that price.Foreign central banks were willing to hold on to the dollars they accumulated,since these paid interest an

45、d represented an international money par excellence.The Confidence problemThe foreign holdings of dollars increased until they exceeded U.S.gold reserves and the U.S.could not redeem them.Slide 18-34Copyright 2003 Pearson Education,Inc.Special Drawing Right(SDR)An artificial reserve assetSDRs are us

46、ed in transactions between central banks but had little impact on the functioning of the international monetary system.The External Balance Problem of the United StatesSlide 18-35Copyright 2003 Pearson Education,Inc.Figure 18-4:U.S.Macroeconomic Data,1964-1972The External Balance Problem of the Unit

47、ed StatesSlide 18-36Copyright 2003 Pearson Education,Inc.Figure 18-4:ContinuedThe External Balance Problem of the United StatesSlide 18-37Copyright 2003 Pearson Education,Inc.The External Balance Problem of the United StatesFigure 18-4:ContinuedSlide 18-38Copyright 2003 Pearson Education,Inc.The Ext

48、ernal Balance Problem of the United StatesFigure 18-4:ContinuedSlide 18-39Copyright 2003 Pearson Education,Inc.Slide 18-40Copyright 2003 Pearson Education,Inc.The acceleration of American inflation in the late 1960s was a worldwide phenomenon.It had also speeded up in European economies.When the res

49、erve currency country speeds up its monetary growth,one effect is an automatic increase in monetary growth rates and inflation abroad.U.S.macroeconomic policies in the late 1960s helped cause the breakdown of the Bretton Woods system by early 1973.Worldwide Inflation and the Transition to Floating R

50、atesSlide 18-41Copyright 2003 Pearson Education,Inc.Table 18-1:Inflation Rates in European Countries,1966-1972 (percent per year)Worldwide Inflation and the Transition to Floating RatesSlide 18-42Copyright 2003 Pearson Education,Inc.Figure 18-5:Effect on Internal and External Balance of a Rise in th