Internal and External Balance with Fixed Exchange Rates

# 第23章 Internal and External Balance with Fixed Exchange Rates

## 章节概览
Internal and External Balance with Fixed Exchange Rates This chapter presents the analysis of the macroeconomy of a country that has a fixed exchange rate. As noted in the introduction, this analysis is important because some countries currently have fixed exchange rates or floating rates that are so heavily managed that they resemble fixed rates, and because there are ongoing discussions of proposals to return to a system of fixed rates among the world's major currencies.

## 知识点
### 1. From the Balance of Payments to the Money Supply
- 教学说明：When the country has an official settlements balance surplus, and its central bank intervenes to prevent its currency from appreciating, the central bank must sell domestic currency and buy foreign currency. This increases the central bank's holdings of official reserves and increases its liabilities as the domestic currency is added to the economy.
- 支撑要点：If the country has an official settlement balance surplus, so that the exchange-rate value of the country’s currency is experiencing upward pressure, the central bank must intervene to buy foreign currency and sell domestic currency. This will have the following effects on the central bank’s balance sheet:
- 支撑要点：Official international reserve holdings increase so that R will rise.
- 支撑要点：Liabilities increase, probably an increase in bank deposits at the central bank.
- 来源类型：manual

### 2. From Money Supply Back to the Balance of Payments
- 教学说明：A Tale of Three Countries: (a) If Germany had raised taxes in 1991, then the story probably would have turned out better. If Germany raised taxes, then more of the effort to restrain the excessive growth and overheating of the German economy would have been driven by a shift to the left of Germany’s IS curve (from IS2 back toward IS1), so less of the restraint would have come from the tightening of German monetary policy (Germany’s new LM3 would be to the right of the LM3 shown in the box).
- 支撑要点：If the country begins with a surplus in its overall balance, the surplus requires the central bank to buy foreign currency and sell domestic currency.
- 支撑要点：As the central bank increases the monetary base (bank reserves), it tends to reduce interest rates.
- 支撑要点：The lower interest rates will have several effects on the country’s balance of payments.
- 来源类型：manual

### 3. Sterilization
- 教学说明：Rather than allowing these automatic adjustments toward external balance, the monetary authority can resist by sterilization—taking an offsetting domestic action (like an open market operation) to reduce or eliminate the effect of the intervention on the domestic money supply. This is a wait-and-see strategy. There are limits to how long the country can continue to run an overall payments imbalance.
- 支撑要点：The central bank can keep the external surplus or deficit from having an impact on the domestic money supply by taking offsetting actions.
- 支撑要点：Sterilization
- 支撑要点：is action by the central bank to reverse the effects of official intervention on the domestic money supply.
- 来源类型：manual

### 4. Monetary Policy with Fixed Exchange Rates
- 教学说明：A Tale of Three Countries: (a) If Germany had raised taxes in 1991, then the story probably would have turned out better. If Germany raised taxes, then more of the effort to restrain the excessive growth and overheating of the German economy would have been driven by a shift to the left of Germany’s IS curve (from IS2 back toward IS1), so less of the restraint would have come from the tightening of German monetary policy (Germany’s new LM3 would be to the right of the LM3 shown in the box).
- 支撑要点：Official Intervention
- 支撑要点：Under a fixed exchange-rate regime, the government must defend that rate.
- 支撑要点：The first line of defense is official intervention: The monetary authority (the central bank) buys or sells foreign currency in the foreign exchange market as necessary to keep the exchange rate within the allowable band around the pegged exchange-rate value.
- 来源类型：manual

### 5. Fiscal Policy with Fixed Exchange Rates
- 教学说明：A change in fiscal policy has two opposing effects on the country's overall payments balance. For instance, a shift to expansionary fiscal policy tends to increase both interest rates and real GDP, so the financial account tends to improve while the current account tends to deteriorate. If the former predominates, then the country's overall payments tend to go into surplus.
- 支撑要点：The effectiveness of fiscal policy will depend on the responsiveness of capital flows to the interest rate changes following a fiscal policy.
- 支撑要点：If capital flows are very sensitive to interest rate changes (high capital mobility), then the capital flows will be very large, and the official settlements balance will go into surplus.
- 支撑要点：If capital flows are unresponsive (low capital mobility), then the financial account will only improve a little, and the overall balance will go into deficit.
- 来源类型：manual

### 6. Perfect Capital Mobility
- 教学说明：In the extreme case of perfect capital mobility (with investors expecting the fixed rate to be maintained), monetary policy has no independent effectiveness even in the short run, while fiscal policy has a strong (full spending multiplier) effect on real GDP. The FE curve is a flat line, and the LM curve is effectively this same flat line.
- 支撑要点：A practically unlimited amount of international financial capital flows in response to the slightest change in one country’s interest rates.
- 支撑要点：Perfect capital mobility with fixed exchange rates:
- 支撑要点：Makes it impossible for monetary policy to influence interest rates or the domestic economy.
- 来源类型：manual

### 7. Shocks to the Economy
- 教学说明：We can examine how shocks affect the economy of a country with a fixed exchange rate. A domestic monetary shock has a limited effect. A change in fiscal policy is an example of a domestic spending shock. An international capital flow shock shifts the FE curve. The intervention to defend the fixed exchange rate results in effects on the domestic economy.
- 支撑要点：Internal shocks
- 支撑要点：Domestic monetary shocks
- 支撑要点：Domestic spending shocks
- 来源类型：manual

### 8. Imbalances and Policy Responses
- 教学说明：We can examine how shocks affect the economy of a country with a fixed exchange rate. A domestic monetary shock has a limited effect. A change in fiscal policy is an example of a domestic spending shock. An international capital flow shock shifts the FE curve. The intervention to defend the fixed exchange rate results in effects on the domestic economy.
- 支撑要点：A country wants to achieve both internal balance and external balance. Yet, its actual performance often falls short of these goals.
- 支撑要点：The government of a country in one of the two dilemma cases (deficit and high unemployment, or surplus and rapid inflation) has three basic choices:
- 支撑要点：Abandon the goal of external balance (abandon the fixed exchange rate).
- 来源类型：manual

## 案例
### 案例 1: c.The rightward shift of the IS curve results in a new ...
c.The rightward shift of the IS curve results in a new IS'-LM intersection with some increase in the level of domestic product. The increase in domestic product and income also increases the country's imports. To proceed, let's examine the "normal" case in which the country then has a current account and overall payments surplus, because the increase in exports is larger than the initial increase in imports.

### 案例 2: The effect of a large, abrupt change in the exchange rate ...
The effect of a large, abrupt change in the exchange rate on the value of the country's current account (or trade) balance is not so straightforward. The value of the country's current account, measured in foreign currency (superscript fc), is CA = Pfcx X Pfcm M. The effects of a devaluation of the country's currency are: (1) no change or decrease in the foreign currency price of its exports (Pfcx), (2) no change or increase in the volume of exports (X), (3) no change or decrease in the foreign currency price of its imports (Pfcm), and (4) no change or decrease in the volume of imports (M).

### 案例 3: A Tale of Three Countries: (a) If Germany had raised taxes ...
A Tale of Three Countries: (a) If Germany had raised taxes in 1991, then the story probably would have turned out better. If Germany raised taxes, then more of the effort to restrain the excessive growth and overheating of the German economy would have been driven by a shift to the left of Germany’s IS curve (from IS2 back toward IS1), so less of the restraint would have come from the tightening of German monetary policy (Germany’s new LM3 would be to the right of the LM3 shown in the box).

### 案例 4: This chapter presents the analysis of the macroeconomy of a country ...
This chapter presents the analysis of the macroeconomy of a country that has a fixed exchange rate. As noted in the introduction, this analysis is important because some countries currently have fixed exchange rates or floating rates that are so heavily managed that they resemble fixed rates, and because there are ongoing discussions of proposals to return to a system of fixed rates among the world's major currencies.

## 习题
### 题目 1
Which of the following can be considered as domestic assets of a country's central bank?
- A) Bank deposits at the central bank
- B) The country's government bonds owned by the central bank
- C) Foreign currency assets held by the central bank
- D) Currency issued by the central bank

### 题目 2
The sum of currency issued by the central bank and bank deposits at the central bank is called
- A) the money supply.
- B) domestic assets.
- C) the monetary base.
- D) fractional reserves.

### 题目 3
Official intervention in the foreign exchange market to defend a fixed-exchange rate when the value of the country's currency is under downward pressure causes
- A) international reserve holdings to fall.
- B) a downward pressure on the country's interest rates.
- C) no change in the liabilities of the central bank.
- D) the domestic money supply to rise.

### 题目 4
Consider a country that has an official settlements balance surplus and is experiencing upward pressure on the exchange-rate value of its currency. Which of the following will NOT be true in this context?
- A) The central bank of this country must intervene to buy foreign currency and sell domestic currency.
- B) Its balance sheet will show an increase in official international reserve holdings.
- C) Its balance sheet will show an increase in its liabilities.
- D) For the regular bank that is involved in the intervention transaction, the central bank decreases the bank's deposits at the central bank.

### 题目 5
A(n) ________ of the money supply in a country ________ the domestic interest rates.
- A) expansion; increases
- B) expansion; decreases
- C) contraction; decreases
- D) contraction; has no impact on

### 题目 6
A(n) ________ in a country's money supply causes international capital
- A) expansion; outflows.
- B) expansion; inflows.
- C) contraction; outflows.
- D) contraction; stock to stabilize.

### 题目 7
The initial impact of ________ the money supply ________ the balance of payments.
- A) expanding; worsens
- B) expanding; improves
- C) contracting; worsens
- D) contracting; has no effect on

### 题目 8
Assuming no effect on exchange rates, which of the following is likely to happen if the money supply in a country contracts?
- A) Decline in the international price competitiveness
- B) Rise in the interest rates
- C) Fall in the inflow of financial capital
- D) Rise in the real spending

## 参考答案
- 题目 1: 答案：B | 选项内容：The country's government bonds owned by the central bank | Topic：From the Balance of Payments to the Money Supply | Difficulty：1 Easy
- 题目 2: 答案：C | 选项内容：the monetary base. | Topic：From the Balance of Payments to the Money Supply | Difficulty：1 Easy
- 题目 3: 答案：A | 选项内容：international reserve holdings to fall. | Topic：From the Balance of Payments to the Money Supply | Difficulty：2 Medium
- 题目 4: 答案：D | 选项内容：For the regular bank that is involved in the intervention transaction, the central bank decreases the bank's deposits at the central bank. | Topic：From Money Supply Back to the Balance of Payments | Difficulty：2 Medium
- 题目 5: 答案：B | 选项内容：expansion; decreases | Topic：From Money Supply Back to the Balance of Payments | Difficulty：2 Medium
- 题目 6: 答案：A | 选项内容：expansion; outflows. | Topic：From Money Supply Back to the Balance of Payments | Difficulty：2 Medium
- 题目 7: 答案：A | 选项内容：expanding; worsens | Topic：From Money Supply Back to the Balance of Payments | Difficulty：2 Medium
- 题目 8: 答案：B | 选项内容：Rise in the interest rates | Topic：From Money Supply Back to the Balance of Payments | Difficulty：2 Medium

## AI / NextLab 使用建议
- Mundell Trilemma Lab：将《Internal and External Balance with Fixed Exchange Rates》对应的理论或政策机制放到贸易分析实验室中做交互式验证。 https://digitconnection.ai/nextlab/