國(guó)際貨幣與金融經(jīng)濟(jì)學(xué)課后習(xí)題答案 (1)

1、Answers to End of Chapter QuestionsChapter 1Keeping Up With a Changing World-Trade Flows, Capital Flows, and the Balance Of Payments1.The balance on merchandise trade is the difference between exports of goods, 719 and the imports of goods, 1,145, for a deficit of 426. The balance on goods, services

2、 and income is 719 + 279 +284 1145 - 210 269, for a deficit of 342. Adding unilateral transfers to this gives a current account deficit of 391, -342 + (-49) = -391. (Note that income receipts are credits and income payments are debits.) 2.Because the current account balance is a deficit of 391, then

3、 without a statistical discrepancy, the capital account is a surplus of 391. In this problem, however, the statistical discrepancy is recorded as a positive amount (credit) of 11. Hence, the sum of the debits in the balance of payments must exceed the credits by 11. So, the deficit of the current ac

4、count must be greater than the surplus on the capital account by 11. The capital account, therefore, is a surplus of 391 11 = 380.3.A balance-of-payments equilibrium is when the debits and credits in the current account and the private capital account sum to zero. In the problem above we do not know

5、 the private capital account balance. We cannot say, therefore, whether this country is experiencing a balance-of-payments surplus or deficit or if it is in equilibrium.4The current account is a deficit of $541,830 and the private capital account balance is a surplus of $369,068. The U.S., therefore

6、, has a balance of payments deficit.5Positive aspects of being a net debtor include the possibility of financing domestic investment that is not possible through domestic savings; thereby allowing for domestic capital stock growth which may allow job, productivity, and income growth. Negative aspect

7、s include the fact that foreign savings may be used to finance domestic consumption rather than domestic savings; which will compromise the growth suggested above.Positive aspects of being a net creditor include the ownership of foreign assets which can represent an income flows to the crediting cou

8、ntry. Further, the net creditor position also implies a net exporting position. A negative aspect of being a net creditor includes the fact that foreign investment may substitute for domestic investment.6A nation may desire to receive both portfolio and direct investment due to the type of investmen

9、t each represents. Portfolio investment is a financial investment while direct investment is dominated by the purchase of actual, real, productive assets. To the extent that a country can benefit by each type of investment, it will desire both types of investment. Further, portfolio investment tends

10、 to be short-run in nature, while FDI tends to be long-run in nature. This is also addressed in much greater detail in Chapter 7.7. Domestic Savings - Domestic Investment = Current Account Balance Domestic Savings - Domestic Investment = Net Capital Flows Therefore, Current Account Balance = Net Cap

11、ital Flows8Using the equations above, private savings of 5 percent of income, government savings of -1 percent, and investment expenditures of 10 percent would results in a current account deficit of 6 percent of income and a capital account surplus (net capital inflows) of 6 percent of income. This

12、 could be corrected with a reduction in the government deficit (to a surplus) and/or an increase in private savings.Chapter 2The Market for Foreign Exchange1.Because it costs fewer dollars to purchase a euro after the exchange rate change, the euro depreciated relative to the dollar. The rate of dep

13、reciation (in absolute value) was (1.2168 1.2201)/1.2201100 = 0.27 percent.2.Note that the rates provided are the foreign currency prices of the U.S. dollar. Every value has been rounded to two decimal places which may cause some differences in answers.A$£C$Sfr$Australia-2.351.061.121.53Britain

14、0.42-0.450.470.65Canada0.952.23-1.061.45Switzerland0.902.110.94-1.37United States0.651.540.690.73-3The cross rate is 1.702/1.234 = 1.379 (/£), which is smaller in value than that observed in the London market. The arbitrageur would purchase £587,544 ($1,000,000/1.702) with the $1 million i

15、n the New York market. Next they would use the £587,544 in London to purchase 837,250 (£587,544*1.425). Finally, they would sell the 837,250 in the New York market for $1,033,167 (837,250*1.234). The profit is #33,167.4.Total trade is (163,681 + 160,829 + 261,180 + 210, 590) = 796,280. Tra

16、de with the Euro area is (163,681 + 261,180) = 424,861. Trade with Canada is (160,829 + 210,590) = 371,419. The weight assigned to the euro is 424,861/796,280 = 0.53 and the weight assigned to the Canadian dollar is 0.47. (Recall the weights must sum to unity.)Because the base year is 2003, the 2003

17、 EER is 100. The value of the 2004 EER is:(0.82/0.88)0.53 + (1.56/1.59)0.47100 = (0.4939 + 0.4611)100 = 95.4964, or 95.5. This represents a 4.5 percent depreciation of the U.S. dollar.5The real effective exchange rate (REER) for 2003 is still 100. The real rates of exchange are, for 2003, 0.88(116.2

18、/111.3) = .9187, 1.59(116.2/111.7) = 1.6541, and for 2004, 0.82(119.0/114.4) = 0.8530, 1.56(119.0/115.6) = 1.6059. The value of the 2004 REER is: (0.8530/0.9187)0.53 + (1.6059/1.6541)0.47100 = (0.4921 + 0.4563)100 = 94.84, or 94.8. This represents a 5.2 percent depreciation of the U.S. dollar in rea

19、l terms6.This is a nominal appreciation of the euro relative to the U.S. dollar. The percent change is (1.19 1.05)/1.05100 = 13.3 percent.7.The January 200 real exchange rate is 1.05(107.5/112.7) = 1.0016. The May 2004 real rate is 1.19(116.4/122.2) = 1.1335.8In real terms the euro appreciated relat

20、ive to the U.S. dollar. The rate of appreciation is (1.1335 1.0016)/1.0016*100 = 13.17 percent.9Absolute PPP suggests the May 2004 exchange rate should be 122.2/116.4 = 1.0498. The actual exchange rate is 1.19. Hence, the euro is overvalued relative to the U.S. dollar by (1.19 1.0498)/1.0498100 = 13

21、.35 percent.10Relative PPP can be used to calculate a predicted value of the exchange rate as:SPPP = 1.05(122.2/112.7)/(116.4/107.5) = 1.0014. 11.The actual exchange rate is 1.19. Hence, the euro is overvalued relative to the U.S. dollar by (1.19 1.0014)/1.0014100 = 18.83 percent.Chapter 3Exchange R

22、ate Systems, Past to Present1.Ranking the various exchange rate arrangements by flexibility is not so clear cut. Nonetheless the arrangements described in this chapter are (from fixed to flexible): dollarization, currency board, commodity (standard) peg, dollar (standard) peg, currency basket peg, c

23、rawling peg, managed float, flexible.2.The two primary functions of the International Monetary Fund are: surveillance of member nations' macroeconomic policies, and to provide liquidity to member nations experiencing payments imbalances.3. The value of the Canadian dollar relative to gold is CAN

24、$69 (1.38 $50) and the value of the British pound relative to gold is £33.33 ($50/1.50).4.The exchange rate between the Canadian dollar and the British pound is C$/£2.07 (1.38 1.50).5.The currency value of the peso can be expressed as $0.50 + .50=P1. The exchange rate between the dollar an

25、d the euro can be used to convert the euro amount to its dollar equivalent of $0.55. Hence, $1.05=P1, or and exchange value of 0.952 P/$. Using the exchange rate between the dollar and the euro again, the exchange rate between the peso and the euro is 0.1.048 P/ (0.952 P/$ 1.10 $/). 6.Because $1.05

26、is the currency content of the basket, as shown above, and $0.50 of that content is attributable to the dollar, the weight assigned to the dollar is 0.50/1.05 = 0.476, or 47.6 percent. Because the weights must sum to unity, the weight assigned to the euro is 52.4 percent.7.The main difference betwee

27、n the two systems was that, in the Smithsonian system, the dollar was not pegged to the value of gold. One reason that the system was short was because there was little confidence that U.S. economic policy would be conducted in a manner conducive to a system of pegged exchange rates.8.The principle

28、responsibilities of a currency board are to issue domestic currency notes and peg the value of the domestic currency. A currency board is not allowed to purchase domestic debt, act as a lender of last resort, or set reserve requirements. 9. The Lourve accord established unofficial limits on currency

29、 value movements. In a sense, it was peg with bands for each of the main currencies (dollar, yen and mark). 10.Differences in the fundamental determinants of currency values between the pegging country and the other country should be considered. To this point of the text, the rate of inflation is a

30、good example. Relative PPP can be used to determine the rate of crawl.11.Under a currency board system, a nation still maintains its domestic currency. Hence, policymakers can change exchange rate policies and monetary policies if they so desire. When a nation dollarizes and disposes of its domestic

31、 currency it no longer has this option.Chapter 4The Forward Currency Market and International Financial Arbitrage1. Given that the exchange rate is expressed as dollars to euros, we treat the dollar as the domestic currency. Note also that interest rates are quoted on an annual basis even though the

32、 maturity period is only one month. In this problem we divide the interest rates by 12 to put them on a one-month basis.a.The interest rate differential, therefore, is (1.75%/12 - 3.25%/12) = -0.125%. The forward premium/discount, expressed as a percentage, is calculated as: (F-S)/S)100 = (1.089 1.0

33、72)/1.072)100=1.5858% R R*450(F-S)/S-0.1251.58581.00-1.00 b.Transaction costs are shown in the figure above by the dashed lines that interest the horizontal axis at values of -1.00 and 1.00.c.The positive value indicates that the euro is selling at a premium. In addition, the interest rate different

34、ial favors the euro-denominated instrument. Hence, a saver shift funds to euro-denominated instruments.2. Using the provided information: (1.75/12) (3.25/12) < (1.089 - 1.072/1.072)100 -0.125% < 1.5858%.3.The four markets are graphed below. An explanation follows. $/S0Graph 1, the spot market

35、for the euro.S1S0D1D0Q1Q0 $/S0S1S0Graph 2, the forward market for the euro.S1D0Q1Q0 S0S1 R0S1R1S0R1R0D0D0Q1Q0Q1Q0Graph 4, U.S. loanable fundsGraph 5, Euro loanable funds In graph 1, the demand for the euro rises as international savers shift funds into euro-denominated instruments. In graph 2, the s

36、upply of euros increases in the forward market. (Consider a U.S. saver that moves funds into a euro-denominated instrument. They would desire to sell the euro forward so they may convert euro-denominated proceeds at the time of maturity into their dollar equivalent.) Graph 3 illustrates a decrease i

37、n loanable funds in the United States as savers shift funds to euro-denominated instruments. Graph 4 illustrates the increase in the supply of loanable funds that occurs when savers shift funds to the euro-denominated instrument.4.Because (1.03125) > (1.04250)(1.4575/1.5245) = 0.9967, an arbitrag

38、e opportunity exists in this example if one were to borrow the pound and lend the euro. Suppose you were to borrow one pound, the steps are then:a.Borrow £1, convert to 1.5245 on the spot market.b.Lend euros, yielding 1.5245(1.03125) = 1.5721.c.See euros forward, yielding 1.5721/1.4575 = £

39、1.0787.d.Repay the pound loan at £1(1.04250) = £1.04250.e.The profit is £0.0362, or 3.62 percent.5.Because interest rates are quoted as annualized rates, we need to divide each interest rate by 4 (12/3). The uncovered interest parity equation is: R -R* = (Se+1 - S) /Sa.Rewriting the e

40、quation for the expected future expected exchange rate yields: Se+1 = (R- R*) + 1S b.Using the values given yields the expected future spot rate Se+1 = (0.0124/4 - 0.0366/4) + 11.5245 = 1.5153.6.Given this information, we can calculate the forward premium/discount with the UIP condition:(F - S)/S =

41、R - R* The interest differential is 1.75% - 3.25% = 1.5%. This is the expected forward premium on the euro. Hence, (F 1.08)/1.08 = 0.015 implies that F = 1.0962.7.We can adjust for the shorter maturity by dividing the interest rates by 2 (12/6). Now the interest differential is 0.75%, still a forwar

42、d premium on the euro. The forward rate now is (F 1.08)/1.08 = 0.0075 implies that F = 1.0881.8.The U.S. real rate is 1.24% 2.1% = -0.86% and the Canadian real rate is 2.15% 2.6% = -0.45%. Ignoring transaction costs, because the real interest rates are not equal, real interest parity does not hold.9

43、.Uncovered interest parity is R -R* = (Se+1 - S) /S + .a.Using the same process as in question 5 above, the expected future spot rate is:Se+1 = (R- R*) + 1S,Se+1 = (0.075 - 0.035) + 130.35 = 31.564.b.Using the same process as in question 5 above, the expected future spot rate is:Se+1 = (R- R*) + 1 -

44、 S,Se+1 = (0.075 - 0.035) + 1 0.0230.35 = 30.957.10.Because the forward rate, 30.01, is less than the expected future spot rate, 30.957, you should sell the koruna forward. For example, $1 would purcase k30.957, which you could sell forward yielding k30.957/30.01 = $1.0316.11. International financia

45、l instruments: a. Global Bond: long term instruments issued in the domestic currency. b. Eurobond: term is longer than one year and is issued in a foreign currency. c. Eurocurrency: keyword is that it is a deposit. d. Global equity: keyword is that it is a share.Chapter 7The International Financial

46、Architecture and Emerging Economies1.The difference between direct and indirect financing has to do with whether the borrower and lender seek each other out or whether an intermediary matches borrowers and lenders. Direct financing requires no intermediary to match savers and borrowers. An economy w

47、ill benefit from having both direct and indirect financing because both are appropriate ways to save and invest under different circumstances. As discussed in the text, financial intermediaries absorb a fraction of each saver's dollar that is borrowed. Thus, the intermediary takes some of the fu

48、nds that otherwise would have gone to a borrower. However, the financial intermediary provides an important service by reducing information asymmetries, allowing savers to pool risk, and matching risk and return. Therefore, when an individual cannot research these issues on his/her own, the intermed

49、iary is necessary to help the financial markets operate. However, a strong bond market, in which borrowers and savers can directly interact, allows for informed parties to save the funds that otherwise would go to an intermediary. This, in turn, uses the savings more efficiently.2.Portfolio flows ar

50、e relatively short term in nature (have a shorter term to maturity), involve lower borrowing costs, and can generate near-term income. They also do not require a firm to give up control to a foreign investor. Consequently, they may help to improve capital allocation within an economy and help the ec

51、onomy's financial sector develop. These are all potential benefits of portfolio investments. By the same token, however, they are also relatively easy to reverse in direction, which is a potential disadvantage of portfolio investment. On the other hand, foreign direct investment (FDI) involve so

52、me degree of ownership and control of a foreign firm, are typically long term in nature, and help provide a stabilizing influence on a nation's economy. As such, FDI is typically more difficult to arrange. It is not advantageous to rely on either type of investment exclusively, in so far as each

53、 type accomplishes different goals for an economy. Both near-and long-term capital are important for an economy's growth.3.As either portfolio investment of FDI increase, the demand for the local currency rises (e.g., there is a shift from D0 to D1), which puts upward pressure on the value of th

54、e currency, from S0 to S1. If the central bank expects to hold the value of the currency constant at S0, it will have to increase the quantity of the domestic currency supplied (e.g., accommodate the excess quantity demanded at the initial spot rate S0) to maintain the peg. The opposite would hold f

55、or capital outflows.D0QdQsSSpot Rate = foreign/domesticD1Quantity (domestic currency)S0S14.Suppose that a multinational bank (MNB) headquartered in a developed economy enters a developing economy. The MNB has gained considerable expertise in working as a financial intermediary, and likely has achiev

56、ed economies of scale in doing so. By entering a foreign market, it helps to allocate the savings more efficiently through its intermediation services; which in turn will lead to additional economic development. Specifically, it should help to make sure that the best investment projects are funded.

57、Moreover, the competition it introduces into the capital market helps to improve the quality of the indigenous financial intermediaries. This, in turn, should also add to financial stability.5.Savers and borrowers can also benefit from the regulation of financial intermediaries when portfolio capital flows dominate a country's capital inflows. It can be argued that regulation to