Economia Internacional

Exchange Rates and Open-Economy Macroeconomics
The presentation of international finance theory proceeds by building up an integrated model of
exchange rate and output determination. Successive chapters in the third day construct this model step by step so students acquire a firm understanding of each component as well as the manner in which these components fit together.
* National incomeaccounts
* measures of national income
* measures of value of production
* measures of value of expenditure

* National saving, investment, and the current account
* Balance of payments accounts

1. National Income Accounts
Records the value of national income that results from production and expenditure.
–Producers earn income from buyers who spend money on goods andservices.
–The amount of expenditure by buyers = the amount of income for sellers = the value of production.
–National income is often defined to be the income earned by a nation’s factors of production.
2. Gross national product (GNP) is the value of all final goods and services produced by a nation’s factors of production in a given time period.
–What are factors of production? Factors thatare used to produce goods and services: workers (labor services), physical capital (like buildings and equipment), natural resources and others.
–The value of final goods and services produced by US-owned factors of production are counted as US GNP.
GNP is calculated by adding the value of expenditure on final goods and services produced:
1.Consumption: expenditure by domestic consumers2.Investment: expenditure by firms on buildings & equipment
3.Government purchases: expenditure by governments on goods and services
4.Current account balance (exports minus imports): net expenditure by foreigners on domestic goods and services

GNP is one measure of national income, but a more precise measure of national income is GNP adjusted for following:
1.Depreciation of physical capital resultsin a loss of income to capital owners, so the amount of depreciation is subtracted from GNP.
2.Unilateral transfers to and from other countries can change national income: payments of expatriate workers sent to their home countries, foreign aid and pension payments sent to expatriate retirees.
Another approximate measure of national income is gross domestic product (GDP):
– Gross domestic productmeasures the final value of all goods and services that are produced within a country in a given time period.
– GDP = GNP – payments from foreign countries for factors of production + payments to foreign countries for factors of production
GNP = Expenditure on a Country’s Goods and Services
•The national income identity for an open economy is

Expenditure and Production in an Open Economy
CA = EX– IM = Y – (C + I + G )
•When production > domestic expenditure, exports > imports: current account > 0 and trade balance > 0
–when a country exports more than it imports, it earns more income from exports than it spends on imports
–net foreign wealth is increasing
•When production < domestic expenditure, exports < imports: current account < 0 and trade balance < 0
–when acountry exports less than it imports, it earns less income from exports than it spends on imports
–net foreign wealth is decreasing

Saving and the Current Account
•National saving (S) = national income (Y) that is not spent on consumption (C) or government purchases (G).
S = Y – C – G
S = (Y – C – T) + (T – G)
S = Sp + Sg

Fig. 13-2: U.S. Current Account and Net Foreign Wealth, 1976–2009How Is the Current Account Related to National Saving?
CA = Y – (C + I + G )
= (Y – C – G ) – I
= S – I
Current account = national saving – investment
Current account = net foreign investment
•A country that imports more than it exports has low national saving relative to investment.
CA = S – I or I = S – CA
•Countries can finance investment either by saving or by acquiring foreign...