(3)-Chapter01外匯市場國際金融

Chapter1InternationalEconomicsisDifferentWhatisaNation?Nationsarenotlikeregionsorfamilies,theyaresovereignNocentralcourtcanenforceitswillonthemwithaglobalpoliceforceAnationoftenignorestheinterestsofforeignersAnationcanhaveitsowncurrency,itsownbarrierstotradingwithforeigners,itsowngovernmenttaxingandspending,anditsownlawsofcitizenshipandresidence?2016McGraw-HillEducation.AllRightsReserved.2FourControversiesFourcontroversialdevelopmentsthatframethescopeofwhatyouwilllearnU.S.ExportsofNaturalGasImmigrationChina’sExchangeRateEuroCrisis?2016McGraw-HillEducation.AllRightsReserved.3U.S.ExportsofNaturalGasU.S.productionofnaturalgashadbeenaboutflatfromthemid-1990stothemid-2000s.Asconsumptionincreasedimportsrosefrom13%toover19%in2006,withnearlyalloftheimportsfromCanadathroughpipelinesThecostofproductionfromnewwellsintheU.S.(andCanada)wasrising,asthelowest-costsourceswereexhaustedTypicalproducerpriceofnaturalgasintheU.S.rosefrom$2permillionMMBtuto$6inthemid-2000s?2016McGraw-HillEducation.AllRightsReserved.4U.S.ExportsofNaturalGasAnewextractiontechnology,fracking,wasintroducedwhichenablednaturalgastobeextractedfromshaledeepundergroundU.S.productionofnaturalgasincreasedby31%during2006-2013andimportsfellto11%ofU.S.consumptionTypicalproducerpricewasabout$4during2009-2013andbrieflyfellbelow$2inearly2012?2016McGraw-HillEducation.AllRightsReserved.5U.S.ExportsofNaturalGasShouldtheU.S.exportmorenaturalgas?ArelargeramountsofnaturalgasexportsintheU.S.publicornationalinterest?Howwouldthegasexportsbetransportedandwhatdoesthatdototheoverallcost??2016McGraw-HillEducation.AllRightsReserved.6U.S.ExportsofNaturalGasWhatwouldhappeniftheU.S.governmentpermittedsubstantialamountsofongoingU.S.exports?TheU.S.wouldnotexportallofitsgas—theinternationalnaturalgasmarketwouldreachequilibriumU.S.gasproducersandexportdistributorswouldbenefitandU.S.consumerswouldbeharmedIfenvironmentaleffectsareignored,U.S.producersgainmorethantheU.S.consumerslose?2016McGraw-HillEducation.AllRightsReserved.7U.S.ExportsofNaturalGasEnvironmentaleffects(negativeexternalities)NoxiouschemicalsareintroducedduringthefrackingprocessthatcanleakintogroundwaterBurningnaturalgasreleasescarbondioxide,agreenhousegas,contributingtoglobalwarmingRiskofleakingmethane,anothergreenhousegas,duringextractionMostexpertsthinksthattheenvironmentalrisksarenotthatlarge.?2016McGraw-HillEducation.AllRightsReserved.8U.S.ExportsofNaturalGasNationalgovernmentofficialshavethepowertoenactpoliciesthatcanlimitinternationaltransactionslikeexportingOverall,theU.S.economyislikelytobenefitfromincreasedexportsofnaturalgasComparativeadvantageasabasisforinternationaltradeandthegainsfromtrading?2016McGraw-HillEducation.AllRightsReserved.9ImmigrationAbout230millionpeople,3%oftheworld’spopulationliveoutsidethecountryoftheirbirthFormostindustrializedcountries(anexceptionisJapan)thepercentageofthecountry’spopulationthatisforeign-bornishighManyoftheforeign-bornareillegalimmigrants—over1/4ofthetotalfortheU.S.Immigrationpolicieshavebeensetinplacetoreduceandrestrictimmigration?2016McGraw-HillEducation.AllRightsReserved.10ImmigrationOpponentsofimmigrationstressarangeofproblemstheybelievearisefromimmigration,including:GenerallossestotheeconomyThefiscalburdenfromimmigrants’useofgovernmentservices(healthcare,schooling,etc.)Slowintegrationofimmigrantsintothenewnationalculture,values,andlanguagePotentialofincreasedcrimeLinksofsomeimmigrantsintoterrorism?2016McGraw-HillEducation.AllRightsReserved.11ImmigrationHowmuchharmdoimmigrantsdototheeconomiesofthecountriestheymoveinto?Job-seekingbringsneteconomicbenefitsnotonlytotheimmigrants,buttothereceivingcountryoverallWinnersincludethefirmsthatemploytheimmigrantsandconsumerswhobuytheproductsThegroupthatlosesistheworkerswhocompetewiththeimmigrantsforjobsPuttingthistogether,theneteffectispositive(thewinnerswinmorethantheloserslose)?2016McGraw-HillEducation.AllRightsReserved.12China’sExchangeRateAnexchangerateisthevalueofacountry’scurrencyintermsofsomeothercountry’scurrencyIn1994theChinesegovernmentswitchedfromasystemofseveraldifferentexchangerates,eachapplyingtodifferentkindsofinternationaltransactions,tofixedratetotheU.S.dollarLockedatabout8.28yuanperdollarfrom1997-2005By2003theU.S.governmentbegantocomplainthatChina’sfixed-ratepolicywasunacceptablecurrencymanipulationU.S.threatenedlargenewtariffsonimportsfromChinaiftheyuanwasn’trevalued?2016McGraw-HillEducation.AllRightsReserved.13China’sExchangeRateWasthereproofofmanipulation?(i.e.theexchangeratevalueshouldhavechanged,butdidnot)TheChinesegovernmentcontinuallyhadtogointotheforeignexchangemarkettobuydollarsandselltoyuantokeepthemarketrateequaltothefixed-ratetargetIfithadnotdoneso,theprivatedemandforyuanwouldhaveleadtoariseintheprice(theexchange-ratevalue)oftheyuan?2016McGraw-HillEducation.AllRightsReserved.14China’sExchangeRateTheexchange-ratevaluewastoolow,butbyhowmuch?Estimatesoftheundervaluationwere15-40%buttherearechallengesinmakingthisestimateChinahassubstantialtradesurpluseswiththeU.S.andEuropeanUnion,buthadtradedeficitswithmanyothercountries.Overall,ChinahadatradesurplusChinahasaveryhighnationalsavingratePrivatespeculatorsmoved“hotmoney”intothecountryinhopesofprofitingwhenthevalueoftheyuanincreased?2016McGraw-HillEducation.AllRightsReserved.15China’sExchangeRateIn2005theChinesegovernmentchangedtheexchange-ratevaluefrom8.28yuanperdollarto8.11,arevaluationof2.1%(adecreaseinthevalueofadollaristhesameasanincreaseinthevalueofayuan)Crawlingpeg:smalldailychangesthatresultinaslowcontrolledchangeovertimeintheexchange-ratevalue(By2008thevalueoftheyuanwas6.83yuanperdollar)Worriedabouttheglobalfinancialcrisis,asteadyfixedrate(2008value)wasimplementedfortwoyears?2016McGraw-HillEducation.AllRightsReserved.16China’sExchangeRateAstheworldrecoveredfromtheworstoftheglobalcrisis,pressurewasputbackonChinatoincreasetheexchange-ratevalueoftheyuan,whichwasestimatedtobe15-30%undervaluedIn2010theChinesegovernmentresumedallowingaslowincreaseintheexchange-ratevalueoftheyuanTheforeignpressuremayhavehadsomeeffect,butconditionsinChinawerebeginningtochangeTheyuanmoneysupplyinChinagrewtoorapidly,encouraginglocalborrowingandspendingthatcreatedupwardpressureoftheinflationrate?2016McGraw-HillEducation.AllRightsReserved.17China’sExchangeRateByincreasingtheexchange-ratevalueoftheyuan,theChinesegovernmentwasabletobettermanageitsdomesticeconomyItlowersimportpricesinChina,reducinginflationpressuresSlowsthegrowthofChina’sexports,removingdemandpressureonthepricesofresourcesandproductsReducestheamountofinterventionneeded,reducingthepressureforgrowthofthemoneysupplyTheexchangerateisakeypricethataffectsinternationaltradeflowsofgoodsandservicesandinternationalfinancialflows?2016McGraw-HillEducation.AllRightsReserved.18EuroCrisisTheEuropeanUnionisthemostsuccessfulregionaltradeagreement(28countries)andhaslargelyeliminatedbarrierstogoodsandservicesandmovementoffinancialcapitalamongitsmembercountriesIn1999,11EUcountriesestablishedtheeuroastheircommoncurrencywiththeEuropeanCentralBank(ECB)inchargeofmonetarypolicyfortheeuroarea.TheECB’sprimaryobjectiveispricestability(lowinflationrateofabout2%)?2016McGraw-HillEducation.AllRightsReserved.19EuroCrisisInthefirstdecadetheeuroworkedwellTransactioncostswerereducedRisksofunexpectedexchange-ratechangeswereeliminatedInternationaltradeamongeuro-areacountriesincreasedFinancialmarketsbecamemoreintegratedBy2014therewere18participatingcountries?2016McGraw-HillEducation.AllRightsReserved.20EuroCrisisTheglobalandfinancialeconomiccrisisbeganin2007Therecessiondroveincreasedfiscaldeficitsintomosteuro-areacountriesGreece’sfiscaldeficitwasalmost16%ofitsGDPin2009anditsoutstandinggovernmentdebtroseto130%ofitsGDPBursthousingbubblesinsomeeuro-areacountriesledtorisingdefaultsonmortgages,threateningthesolvencyofthebanksthathadmadetheloansTheIrishgovernmentdecreedthatthegovernmentguaranteedallthedepositsanddebtsoflargeIrishbanks.Asbanklossesmounted,thegovernmentprovidedassistance.Ireland’sfiscaldebtjumpedto30%ofitsGDPin2010andoutstandinggovernmentdebtrosetoover100%by2011?2016McGraw-HillEducation.AllRightsReserved.21EuroCrisisPriorto2008theinterestratesongovernmentdebtsofdifferentcountrieswererelativelyclosetoeachotherIn2009withtherealizationthattheGreekdeficitwasmuchlargerthanpreviouslyreported,theinterestratesonGreekgovernmentdebtbegantorisewellabovethoseforGermany’sgovernmentdebtTheGreekgovernmentconcludedthatitcouldnottakeonsuchexpensivefinancingandtheeurocrisisbeganIn2010theGreekgovernmentreceivedabailoutpackageof110billioneurosfundedbytheothereuro-areacountriesthroughthenewlyformedEuropeanFinancialStabilityFacility(EFSF),theEU,andInternationalMonetaryFund?2016McGraw-HillEducation.AllRightsReserved.22EuroCrisisDrivenbyconcernsabouttherisingcostsofbankbailouts,IrishinterestratesbeganrisingIrelandreceivedbailoutpackagesDrivenbyconcernsaboutexcessivegovernmentandprivatedebt,PortugueseinterestratesbeganrisingPortugalreceivedbailoutpackages?2016McGraw-HillEducation.AllRightsReserved.23EuroCrisisInMarch2012theGreekgovernmentreceiveda2ndbailoutthatadded130billioneurostothe1stone,andtheGreekgovernmentdefaultedonitsprivatelyheldbondsContagionspreadthecrisistothegovernmentbondsofSpainandItaly.SpainandItalyaretoolargetoreceivebailoutpackagescomparabletothoseofGreece,Ireland,andPortugalInlateJuly2012,ECBPresidentDraghipledgedthat“theECBisreadytodowhateverittakestopreservetheeuro.Andbelieveme,itwillbeenough”InSeptembertheECBapprovedthenewOutrightMonetaryTransactionsprogram,inwhichtheE