International Macroeconomics

Description

Balance-of-Payments Accounting......Page 11 The U.S. Current Account......Page 17 Trade Balances and Current-Account Balances Across Countries......Page 20 Imbalances in Merchandise Trade......Page 24 The Current Account and the Net International Investment Position......Page 25 Valuation Changes and the Net International Investment Position......Page 28 The Negative NIIP And Positive NII Paradox: Dark Matter?......Page 36 Dark Matter......Page 37 Return Differentials......Page 39 Who Lends and Who Borrows Around the World?......Page 41 Exercises......Page 44 Can a Country Run a Perpetual Trade Balance Deficit?......Page 51 Can a Country Run a Perpetual Current Account Deficit?......Page 55 Savings, Investment, and the Current Account......Page 57 Current Account Deficits As Reflections of Trade Deficits......Page 58 The Current Account As The Gap Between Savings and Investment......Page 59 The Current Account As the Gap Between National Income and Domestic Absorption......Page 61 Appendix: Perpetual Trade-Balance and Current-Account Deficits in Infinite-Horizon Economies......Page 62 Exercises......Page 68 A Small Open Economy......Page 71 The Intertemporal Budget Constraint......Page 74 The Lifetime Utility Function......Page 76 The Optimal Intertemporal Allocation of Consumption......Page 78 Equilibrium......Page 81 Temporary Versus Permanent Output Shocks......Page 85 Temporary Output Shocks......Page 87 Permanent Output Shocks......Page 90 Terms-of-Trade Shocks......Page 92 Imperfect Information, Terms-of-Trade Shocks, And The Current Account......Page 94 World Interest Rate Shocks......Page 97 An Economy with Logarithmic Preferences......Page 99 Capital Controls......Page 102 Exercises......Page 107 Current Account Determination in a Production Economy......Page 117 The Investment Decision of Firms......Page 118 Households......Page 129 Equilibrium......Page 131 The Savings Schedule......Page 133 Collateral Constraints and Financial Shocks......Page 138 Exercises......Page 139 Uncertainty and the Current Account......Page 143 The Great Moderation......Page 144 A Small Open Economy Model With Uncertainty......Page 147 Exercises......Page 154 The Current Account Schedule......Page 161 External Adjustment in a Small Open Economy......Page 164 Interest Rate Shocks......Page 165 Temporary Output Shock......Page 166 An investment surge......Page 167 Country Risk Premia......Page 169 External Adjustment in a Large Open Economy......Page 171 The Global Saving Glut Hypothesis......Page 173 The Period 1996 to 2006......Page 174 The Period 2006 to 2012......Page 178 Optimal Capital Controls in a Two-Country Model......Page 179 Market Clearing in World Capital Markets......Page 185 Equilibrium Under Free Capital Mobility......Page 186 Equilibrium when country C imposes capital controls......Page 188 Exercises......Page 195 Twin Deficits: Fiscal Deficits and Current Account Imbalances......Page 199 Twin Deficits in the United States......Page 200 Testable Implications of the Twin Deficit Hypothesis......Page 202 The government sector in the open economy......Page 209 Ricardian Equivalence......Page 214 Government Spending and Current Account Deficits......Page 218 Borrowing Constraints......Page 221 Distortionary Taxation......Page 225 Exercises......Page 228 International Capital Market Integration......Page 235 Measuring the degree of capital mobility: (I) Saving-Investment correlations......Page 236 Measuring capital mobility: (II) Interest rate differentials......Page 244 Covered interest rate parity......Page 245 Real interest rate differentials and capital market integration......Page 252 Exchange Risk Premium (f-se)......Page 256 Expected Real Depreciation, se-s+*e-e......Page 257 Uncovered Interest Rate Parity......Page 260 Asset Pricing in a 2-Period Small Open Economy......Page 261 The Forward Premium Puzzle......Page 270 Carry Trade......Page 272 Exercises......Page 276 The Law of One Price......Page 279 Purchasing Power Parity......Page 283 Does Relative PPP Hold?......Page 286 Nontradable Goods and Deviations from Absolute PPP......Page 290 Productivity Differentials and Real Exchange Rates: The Balassa-Samuelson Model......Page 294 Application: The Real Exchange Rate and Labor Productivity: 1970-1993......Page 300 Application: Deviations from PPP observed between rich and poor countries......Page 302 Trade Barriers and Real Exchange Rates......Page 304 Microfoundations of Price Indices......Page 306 Exercises......Page 313 The Argentine Sudden Stop of 2001......Page 321 The TNT Model......Page 329 Real Exchange Rate Adjustment Under a Sudden Stop......Page 335 The Chilean Sudden Stop of the 1980s......Page 336 The Turkish Sudden Stop of 2001......Page 337 Exercises......Page 338 The Great Recession in Peripheral Europe: 2008-2011......Page 343 The Production of Nontraded Goods......Page 346 The Problem of Households......Page 350 The Determination of Wages and Disequilibrium in the Labor Market......Page 356 A Sudden Stop, r1 "3222378 , leads to a contraction in traded consumption, cT1 "3223379......Page 359 Managing a Currency Peg......Page 361 Exercises......Page 365 The debt crisis of developing countries of the 1980s......Page 371 The resurgence of capital inflows to developing countries in the 1990s......Page 378 The Debt Burden......Page 381 Unilateral Debt Forgiveness......Page 384 Debt Overhang......Page 386 Third-party debt buy-backs......Page 390 Debt swaps......Page 392 Exercises......Page 395 Monetary Policy and Nominal Exchange Rate Determination......Page 397 The quantity theory of money......Page 398 A floating (or Flexible) Exchange Rate Regime......Page 400 Fixed Exchange Rate Regime......Page 401 Fiscal deficits, inflation, and the exchange rate......Page 402 The Demand For Money......Page 403 Purchasing power parity (PPP)......Page 404 The interest parity condition......Page 405 The government budget constraint......Page 406 A fixed exchange rate regime......Page 408 Fiscal deficits and the sustainability of currency pegs......Page 409 A constant-money-growth-rate regime......Page 412 The Inflation Tax......Page 415 Inflationary finance......Page 417 Money growth and inflation in a growing economy......Page 422 Balance-of-payments crises......Page 424 Appendix: A dynamic optimizing model of the demand for money......Page 432