32. The S.E. Asian Crisis -1.2% (1996-97) -25.6% -48.3% Thailand -6.8% -43.8% -36.4% Malaysia -4.3% -18.2% -12.0% Japan -0.1% -36.0% -15.6% Singapore n.a. -19.7% -14.6% Taiwan 2.3% 2.7% n.a. U.S. -7.3% -21.9% -47.5% S. Korea -16.2% -32.6% -59.4% Indonesia nominal GDP % change 1997-98 stock market % change from 7/97 to 1/98 exchange rate % change from 7/97 to 1/98
33.
34.
35. Deriving the AD curve Y 1 Y 2 AD Y 2 Y 1 Why AD curve has negative slope: P ( M / P ) LM shifts left NX Y Y Y P IS* LM* ( P 1 ) LM* ( P 2 ) P 1 P 2 2 1
36. From the short run to the long run then there is downward pressure on prices. Over time, P will move down, causing ( M / P ) NX Y LM* ( P 1 ) 1 2 P 1 SRAS 1 Y Y P IS* AD LRAS LM* ( P 2 ) P 2 SRAS 2
37.
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41.
Hinweis der Redaktion
Chapter 12 covers a lot of material. First, it develops the Mundell-Fleming open-economy IS-LM model for a small open economy with perfect capital mobility. The model is used to analyze the effects of fiscal & monetary policy under floating and flexible exchange rates. Trade policy is also considered. Then, the chapter explores interest rate differentials, or risk premia that arise due to country risk or expected changes in exchange rates. The Mundell-Fleming model is used to analyze the effects of a change in the risk premium. The 1994-95 Mexican Peso Crisis is an important real-world example of this. The chapter summarizes the debate over fixed vs. floating exchange rates. Following that discussion, the Mundell-Fleming model is used to derive the aggregate demand curve for a small open economy. And finally, the chapter discusses how the results it derives would be different in a large open economy.