massign14 - Money and Banking N Sheflin ASSIGNMENT 14 NOTES...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Money and Banking N. Sheflin ASSIGNMENT 14 NOTES : Taste of International Economics, Foreign Exchange Markets, International Finance, and Open Economy Monetary Policy – Lots here – start early, will have to read additional material cited. Essential Questions, Review Guide, Q&A schedule – later this week Final Exam Conflicts, special accommodations – see me after class NOW if you have not already. READING Croushore 14 AND Fed Point piece on floating exchange rates at Fed Point piece on fixed exchange rates at Fed Point on Balance of Payments at And take a quick look at Table 1 in Mankiw on the Trilemma and perhaps: Globalization at and and You may also want to look at sections of the New York Fed’s International Publication: foreign exchange and role of central banks. Look at more on international exchange issues For even more, FX Market outline with more details: ((If you need a somewhat longer treatment of these topics, try: and then use the table of contents (detailed view) on the left to go to Chapter 10 - Financial markets and the Economy , section 1, just the portion on Exchange Rates . Also chapter 15: Net Exports and International Finance (if the links don’t work, copy and paste them into the address bar of your browser or google flatworldknowledge and look for the Macro Principles text). KEY POINTS read 3 times, carefully - once before the book, once after and during hw 1. Free Trade is potentially beneficial to all trading partners, although not necessarily equally so o Due to comparative advantage, that is when countries specialize in whatever production they have a relative advantage in (lowest opportunity cost ) o Also, trade leads to increased competition and transmission of ideas and technology o Thus barriers to trade are ‘bad’ o Quota’s, tariffs, restrictions on dumping all reduce gains from trade. Attempts to ‘save jobs’ are very expensive per job and inefficient ± However, trying to assist those who lose jobs with retraining, tax breaks etc may be morally and politically ‘good’ 2. Impact of Open Economy on Macroeconomic issues o X increases aggregate D, M reduces it (D=C+I+G+X-M) ± determinants of X - $, foreign income - note using $ to mean dollar exchange rate with other currencies; example # yen per dollar
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/11/2011 for the course ECON 336 taught by Professor Hassan during the Spring '08 term at Rutgers.

Page1 / 8

massign14 - Money and Banking N Sheflin ASSIGNMENT 14 NOTES...

This preview shows document pages 1 - 2. Sign up to view the full document.

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