Monetary and Fiscal policy in the open economy

Monetary and Fiscal policy in the open economy - Lecture#21...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 1110, Spring 2008, Professor Te 1 Lecture #21 Monetary and Fiscal Policy in the Open Economy
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Econ 1110, Spring 2008, Professor Te 2 Open-Economy IS-LM Model Extend IS-LM Model to Open Economy Open-Economy IS Curve Takes account of net exports LM curve is same in open economy FE line is same in open economy International Transmission of Business Cycles Monetary and Fiscal Policy in Open Economy
Background image of page 2
Econ 1110, Spring 2008, Professor Te 3 NX F r E S - I The Open-Economy IS Curve S I = NX IS Curve Slopes Downward Increase in Y reduces r that clears goods market S I , NX - I S I and S r NX e r 0
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Econ 1110, Spring 2008, Professor Te 4 Anything that Shifts the IS Curve in a Closed Economy Shifts Open-Economy IS Curve in the Same Direction Anything that Increases NX , Given Y and r , Shifts IS Curve Upward Factors that Shift the Open-Economy IS Curve
Background image of page 4
Econ 1110, Spring 2008, Professor Te 5 0 Anything that Increases NX , Given Y and r , Shifts IS Curve Upward • Increase in foreign output, Y For • Increase in foreign real interest rate, r For Shift in world demand toward domestic goods S-I , NX E H r NX S-I Role of Net Exports as IS Shifter IS Y r E H
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Econ 1110, Spring 2008, Professor Te 6 Macroeconomic Policy with
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 19

Monetary and Fiscal policy in the open economy - Lecture#21...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online