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Introduction to International Macroeconomics | |
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The Global Macroeconomy | |
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Foreign Exchange: Of Currencies and Crises | |
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How Exchange Rates Behave | |
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Why Exchange Rates Matter | |
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When Exchange Rates Misbehave | |
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Headlines: Economic Crisis in Argentina | |
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Summary | |
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Globalization of Finance: Of Debts and Deficits | |
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Deficits and Surpluses: The Balance of Payments | |
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Debtors and Creditors: External Wealth | |
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Darlings and Deadbeats: Defaults and Other Risks | |
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Summary | |
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Government and Institutions: Of Policies and Performance | |
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Integration and Capital Controls: The Regulation of International Finance | |
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Independence and Monetary Policy: The Choice of Exchange Rate Regimes | |
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Institutions and Economic Performance: The Quality of Governance | |
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Headlines: The Wealth of Nations | |
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Summary | |
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Conclusions | |
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Exchange Rates | |
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Introduction to Exchange Rates and the ForeigN Exchange Market | |
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Exchange Rate Essentials | |
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Defining the Exchange Rate | |
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Appreciations and Depreciations | |
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Multilateral Exchange Rates | |
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Example: Using Exchange Rates to Compare Prices in a Common Currency | |
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Headlines: By How Much Has the Dollar Fallen? | |
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Exchange Rates in Practice | |
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Exchange Rate Regimes: Fixed Versus Floating | |
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Application: Recent Exchange Rate Experiences | |
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Side Bar: Currency Unions and Dollarization | |
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Exchange Rate Regimes of the World | |
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The Market for Foreign Exchange | |
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The Spot Contract | |
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Transaction Costs | |
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Derivatives | |
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Application: Foreign Exchange Derivatives | |
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Private Actors | |
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Government Intervention | |
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Arbitrage and Spot Exchange Rates | |
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Cross Rates and Vehicle Currencies | |
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Arbitrage and Interest Rates | |
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Riskless Arbitrage: Covered Interest Parity | |
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Application: Evidence on Covered Interest Parity | |
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Risky Arbitrage: Uncovered Interest Parity | |
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Side Bar: Assets and Their Attributes | |
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Application: Evidence on Uncovered Interest Parity | |
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Uncovered Interest Parity: A Useful Approximation | |
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Allowing for Risk | |
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Summary | |
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Conclusion | |
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Exchange Rates I: The Monetary Approach in the Long Run | |
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Exchange Rates and Prices in the Long Run: Purchasing Power Parity and Goods | |
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The Law of One Price | |
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Purchasing Power Parity | |
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The Real Exchange Rate | |
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Absolute PPP and the Real Exchange Rate | |
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Absolute PPP, Prices, and the Nominal Exchange Rate | |
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Relative PPP, Inflation, and Exchange Rate | |
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Summary | |
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Application: Evidence for PPP in the Long Run and Short Run | |
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How Slow is Convergence to PPP? | |
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Side Bar: Forecasting When the Real Exchange Rate is Undervalued or Overvalued | |
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What Explains Deviations from PPP? | |
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Headlines: The Big Mac Index | |
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Money, Prices, and Exchange Rates in the Long Run: Money Market Equilibrium in a Simple Model | |
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What is Money? | |
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The Measurement of Money | |
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The Supply of Money | |
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Demand for Money: A Simple Model | |
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Equilibrium in the Money Market | |
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A Simple Monetary Model of Prices | |
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A Simple Monetary Model of the Exchange Rate | |
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Money Growth, Inflation, and Depreciation | |
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The Monetary Approach: Implications and Evidence | |
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Exchange Rate Forecasts using the Simple Model | |
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Application: Evidence for the Monetary Approach | |
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Application: Hyperinflations of the Twentieth Century | |
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Side Bar: Currency Reform | |
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Headlines: The First Hyperinflation of the Twenty-First Century | |
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Money, Interest, and Prices in the Long Run: A General Model | |
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The Demand for Money: The General Model | |
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Long-Run Equilibrium in the Money Market | |
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Inflation and Interest Rates in The Long Run | |
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The Fisher Effect | |
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Real Interest Parity | |
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Application: Evidence on the Fisher Effect and Real Interest Parity | |
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The Fundamental Equations under the General Model | |
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Exchange Rate Forecasts using the Standard Model | |
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Monetary Regimes and Exchange Rate Regimes | |
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The Long Run: The Nominal Anchor | |
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Side Bar: Nominal Anchors in Theory and Practice | |
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Conclusion | |
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Exchange Rates II: The Asset Approach in the Short Run | |
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Exchange Rates and Interest Rates in the Short Run: UIP and FX Market Equilibrium | |
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Risky Arbitrage | |
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Equilibrium in the FX Market: An Example | |
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Adjustment to FX Market Equilibrium | |
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Changes in Domestic and Foreign Returns and FX Market Equilibrium | |
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Interest Rates in the Short Run: Money Market Equilibrium | |
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Money Market Equilibrium in the Short Run: How Nominal Interest Rates are Determined | |
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Money Market Equilibrium in the Short Run: Graphical Solution | |
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Adjustment to Money Market Equilibrium in the Short Run | |
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Another Building Block: Short-Run Money Market Equilibrium | |
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Changes in Money Supply and the Nominal Interest Rate | |
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Changes in Real Income and the Nominal Interest Rate | |
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The Monetary Model: The Short Run versus the Long Run | |
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The Asset Approach: Applications and Evidence | |
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The Asset Approach to Exchange Rates: Graphical Solution | |
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Short-Run Policy Analysis | |
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Application: The Fall of the Dollar, 1999���200 | |