notes_macro_ch5

notes_macro_ch5 - MACROECONOMICS Macro Notes G.Karras 2011...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
Macro Notes © G.Karras 2011 MACROECONOMICS Georgios Karras* University of Illinois at Chicago * Professor of Economics; Mailing Address: Department of Economics, University of Illinois at Chicago, 601 S. Morgan St., Chicago, IL 60607-7121; e-mail: [email protected] . Lecture Draft Do not cite without permission
Background image of page 1

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

View Full DocumentRight Arrow Icon
Macro Notes © G.Karras 2011, p.2 ││ 5 ││ THE OPEN ECONOMY 5.1. The Balance of Payments Credit Debit Balance Exports EX CA Imports IM Unilateral Transfers UT Current Account Balance CA = EX IM UT KA Capital Inflows CI Capital Outflows CO Capital Account Balance KA = CI CO Balance of Payments BP = CA+KA = 0
Background image of page 2
Macro Notes © G.Karras 2011, p.3 Note: CA + KA = 0 CA = KA CA │ = │ KA CA deficit = KA surplus or CA surplus = KA deficit Intuition: Capital Account shows how Current Account is financed
Background image of page 3

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

View Full DocumentRight Arrow Icon
Macro Notes © G.Karras 2011, p.4
Background image of page 4
Macro Notes © G.Karras 2011, p.5
Background image of page 5

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

View Full DocumentRight Arrow Icon
Macro Notes © G.Karras 2011, p.6
Background image of page 6
Macro Notes © G.Karras 2011, p.7 5.2. The Equilibrium Relationship revisited Closed-Economy Equilibrium: 0 I S I G C Y G I C Y S S S G P   Open-Economy Equilibrium: NX I S I G C Y G I C Y S S S G P
Background image of page 7

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

View Full DocumentRight Arrow Icon
Macro Notes © G.Karras 2011, p.8
Background image of page 8
Macro Notes © G.Karras 2011, p.9
Background image of page 9

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

View Full DocumentRight Arrow Icon
Macro Notes © G.Karras 2011, p.10 5.3. The Small Open Economy: Equilibrium Open : NX ≠ 0 S I Small : takes the worldwide interest rate, r w , as given Case 1: Suppose r w > r 0 S 1 > I 1
Background image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/07/2011 for the course ECON 221 taught by Professor Georgioskarras during the Fall '10 term at Ill. Chicago.

Page1 / 32

notes_macro_ch5 - MACROECONOMICS Macro Notes G.Karras 2011...

This preview shows document pages 1 - 11. Sign up to view the full document.

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