Floating Exchange Rates and Internal Balance

# 第24章 Floating Exchange Rates and Internal Balance

## 章节概览
Floating Exchange Rates and Internal Balance This chapter presents the analysis of the macroeconomy of a country that has a floating exchange rate. If government officials allow the exchange rate to float cleanly, then the exchange rate changes to achieve external balance. With floating exchange rates monetary policy exerts strong influence on domestic product and income. A change in monetary policy results in a change in the country's interest rates.

## 知识点
### 1. Monetary Policy with Flexible Exchange Rates
- 教学说明：With floating exchange rates monetary policy exerts strong influence on domestic product and income. A change in monetary policy results in a change in the country's interest rates. Both the current account and the financial account tend to change in the same direction. To keep the overall payments in balance, the exchange rate must change.
- 支撑要点：Shocks to the economy alter both the international performance of the country’s economy and its domestic performance.
- 支撑要点：With floating exchange rates, a change in the exchange rate takes care of achieving external balance following a shock.
- 支撑要点：If the country’s overall payments tend to go into deficit, then the country’s currency depreciates, reversing the tendency toward deficit.
- 来源类型：manual

### 2. Fiscal Policy with Flexible Exchange Rates
- 教学说明：With floating exchange rates the effect of a change in fiscal policy depends on how responsive international capital flows are to changes in interest rates. If capital flows are sufficiently responsive, then the exchange rate changes in the direction that counters the thrust of the fiscal policy change—an effect sometimes called international crowding out.
- 支撑要点：Long description on slide 6
- 来源类型：manual

### 3. International Macroeconomic Policy Coordination
- 教学说明：Changes in government policies adopted by one country can have spillover effects on other countries. International macroeconomic policy coordination involves some degree of joint determination of several countries' macroeconomic policies to improve joint performance. Efforts at policy coordination in the late 1970s and 1980s include the agreement at the Bonn Summit of 1978, the Plaza Agreement of 1985, and the Louvre Accord of 1987, but major efforts at coordination are infrequent.
- 支撑要点：The policies adopted by one country have effects on other countries.
- 支撑要点：A policy change that benefits the country making it may harm other countries.
- 支撑要点：A country may fail to make a policy change that benefits other countries.
- 来源类型：manual

### 4. Shocks to the Economy
- 教学说明：Domestic monetary shocks have strong effects on domestic product, with the exchange rate change reinforcing the thrust of the shock. The effects of domestic spending shocks depend on how responsive international capital flows are to changes in interest rates. International capital flow shocks affect the domestic economy by changing the exchange rate and the country's international price competitiveness.
- 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

### 5. Internal Imbalance and Policy Responses
- 教学说明：While a cleanly floating exchange rate ensures external balance, it does not ensure internal balance, and changes in the floating exchange rate to achieve external balance can exacerbate an internal imbalance. Government monetary or fiscal policies may be used to address internal imbalances.
- 支撑要点：Shocks to the economy alter both the international performance of the country’s economy and its domestic performance.
- 支撑要点：With floating exchange rates, a change in the exchange rate takes care of achieving external balance following a shock.
- 支撑要点：If the country’s overall payments tend to go into deficit, then the country’s currency depreciates, reversing the tendency toward deficit.
- 来源类型：manual

### 6. International Microeconomic Policy Coordination
- 教学说明：Changes in government policies adopted by one country can have spillover effects on other countries. International macroeconomic policy coordination involves some degree of joint determination of several countries' macroeconomic policies to improve joint performance. Efforts at policy coordination in the late 1970s and 1980s include the agreement at the Bonn Summit of 1978, the Plaza Agreement of 1985, and the Louvre Accord of 1987, but major efforts at coordination are infrequent.
- 支撑要点：The policies adopted by one country have effects on other countries.
- 支撑要点：A policy change that benefits the country making it may harm other countries.
- 支撑要点：A country may fail to make a policy change that benefits other countries.
- 来源类型：manual

### 7. Floating Exchange Rates
- 教学说明：Floating Exchange Rates and Internal Balance
- 支撑要点：Floating Exchange Rates and Internal Balance
- 来源类型：manual

## 案例
### 案例 1: This is what did happen. On March 18, the monetary authorities ...
This is what did happen. On March 18, the monetary authorities of Japan, the United States, Britain, Canada, and the euro area conducted a coordinated intervention totaling about $10.4 billion. Within an hour of the announcement of the impending intervention, the yen depreciated 3 to 4 percent and then stayed at the lower exchange rate values for the next week.

### 案例 2: The box on “Why Are U.S. Trade Deficits So Big?” provides ...
The box on “Why Are U.S. Trade Deficits So Big?” provides an application of the floating-rate analysis to the macroeconomic experience of the United States since 1980. The box shows that changes in the real exchange rate and changes in the trade deficit (with the expected lag) have been closely correlated. Digging behind this relationship to examine saving and real investment, it appears that the large U.S.

### 案例 3: c.If the dollar depreciates, then the United States gains international  ...
c.If the dollar depreciates, then the United States gains international price competitiveness. U.S. exports increase and imports decrease. The current account improves further. The increase in exports and shift of domestic spending from imports to domestic products add some aggregate demand, so domestic product and income rebound somewhat (or do not decline by as much).

### 案例 4: Changes in government policies adopted by one country can have spillover ...
Changes in government policies adopted by one country can have spillover effects on other countries. International macroeconomic policy coordination involves some degree of joint determination of several countries' macroeconomic policies to improve joint performance. Efforts at policy coordination in the late 1970s and 1980s include the agreement at the Bonn Summit of 1978, the Plaza Agreement of 1985, and the Louvre Accord of 1987, but major efforts at coordination are infrequent.

## 习题
### 题目 1
Under a floating exchange-rate regime
- A) only fiscal policy should be used to reconcile the goals of internal and external balance.
- B) the changes in the exchange rate can take care of external balance, leaving macroeconomic policy to take care of internal balance.
- C) deficits and surpluses in the official settlements balance will be the primary concern of policy makers.
- D) monetary policy must be used to manage the exchange rate.

### 题目 2
Changes in floating exchange rates move a country's economy to:
- A) its potential real GDP.
- B) a low value for its inflation rate.
- C) a zero value for its official settlements balance.
- D) all of the above.

### 题目 3
Other fundamental things equal, an increase in the exchange-rate value of the domestic currency will make domestic goods
- A) more in demand internationally.
- B) less competitive in the international markets.
- C) more expensive in the domestic market.
- D) more expensive to produce.

### 题目 4
Other fundamental things being equal, a decrease in the exchange rate value of the domestic currency will make domestic goods
- A) more in demand internationally.
- B) less competitive in the international markets.
- C) less expensive in the domestic market.
- D) less expensive to produce.

### 题目 5
Other fundamental things being equal, an increase in the exchange-rate value of the domestic currency will cause the current account to
- A) become more unbalanced.
- B) become smaller than the (nonofficial) financial account.
- C) move toward a long-run equilibrium.
- D) move toward a deficit.

### 题目 6
Other fundamental things being equal, a decrease in the exchange rate value of domestic currency will cause the current account to
- A) overshoot its long-run value.
- B) equal the official settlements balance.
- C) move toward a surplus.
- D) move toward a long-run deficit.

### 题目 7
An expansion of the money supply by the country's central bank
- A) decreases the willingness of banks to lend money.
- B) reduces the price level.
- C) increases the level of international capital inflows.
- D) causes domestic interest rates to fall.

### 题目 8
Under a floating exchange-rate regime, an expansion in the money supply will
- A) induce financial capital to leave the country.
- B) attract speculative capital into the country.
- C) have no effect on financial account balance.
- D) cause a surplus in the official settlement balance.

## 参考答案
- 题目 1: 答案：B | 选项内容：the changes in the exchange rate can take care of external balance, leaving macroeconomic policy to take care of internal balance. | Topic：Monetary Policy with Flexible Exchange Rates | Difficulty：2 Medium
- 题目 2: 答案：C | 选项内容：a zero value for its official settlements balance. | Topic：Monetary Policy with Flexible Exchange Rates | Difficulty：1 Easy
- 题目 3: 答案：B | 选项内容：less competitive in the international markets. | Topic：Monetary Policy with Flexible Exchange Rates | Difficulty：2 Medium
- 题目 4: 答案：A | 选项内容：more in demand internationally. | Topic：Monetary Policy with Flexible Exchange Rates | Difficulty：2 Medium
- 题目 5: 答案：D | 选项内容：move toward a deficit. | Topic：Monetary Policy with Flexible Exchange Rates | Difficulty：2 Medium
- 题目 6: 答案：C | 选项内容：move toward a surplus. | Topic：Monetary Policy with Flexible Exchange Rates | Difficulty：2 Medium
- 题目 7: 答案：D | 选项内容：causes domestic interest rates to fall. | Topic：Monetary Policy with Flexible Exchange Rates | Difficulty：1 Easy
- 题目 8: 答案：A | 选项内容：induce financial capital to leave the country. | Topic：Monetary Policy with Flexible Exchange Rates | Difficulty：1 Easy

## AI / NextLab 使用建议
- Mundell Trilemma Lab：将《Floating Exchange Rates and Internal Balance》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/