米什金货币金融学(英文)ppt (19)

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1、Chapter19TheForeignExchangeMarket©2005PearsonEducationCanadaInc.ForeignExchangeIExchangerate:priceofonecurrencyintermsofanotherForeignexchangemarket:thefinancialmarketwhereexchangeratesaredeterminedSpottransaction:immediate(two-day)exchangeofbankdepositsSpotexchangerate

2、Forwardtransaction:theexchangeofbankdepositsatsomespecifiedfuturedateForwardexchangerateForeignExchangeIIAppreciation:acurrencyrisesinvaluerelativetoanothercurrencyDepreciation:acurrencyfallsinvaluerelativetoanothercurrencyWhenacountry’scurrencyappreciates,thecountry’sg

3、oodsabroadbecomemoreexpensiveandforeigngoodsinthatcountrybecomelessexpensiveandviceversaOver-the-countermarketmainlybanks©2005PearsonEducationCanadaInc.19-4ForeignExchangeRates©2005PearsonEducationCanadaInc.19-5TheForeignExchangeMarketDefinitions:1.Spotexchangerate2.For

4、wardexchangerate3.Appreciation4.DepreciationCurrencyappreciates,country’sgoodspricesabroadandforeigngoodspricesinthatcountry1.Makesdomesticbusinesseslesscompetitive2.BenefitsdomesticconsumersFXtradedinover-the-countermarket1.Tradeisinbankdepositsdenominatedindifferent

5、currencies19-6LawofOnePriceExample:Canadiansteel$100perton,Japanesesteel10,000yenpertonIfE=50yen/$thenpricesare:CanadianSteelJapaneseSteelInCanada$100$200InJapan5000yen10,000yenIfE=100yen/$thenpricesare:CanadianSteelJapaneseSteelInCanada$100$100InJapan10,000yen10,000yen

6、LawofonepriceE=100yen/$©2005PearsonEducationCanadaInc.©2005PearsonEducationCanadaInc.19-7PurchasingPowerParity(PPP)PPPDomesticpricelevel10%,domesticcurrency10%1.Applicationoflawofonepricetopricelevels2.Worksinlongrun,notshortrunProblemswithPPP1.Allgoodsnotidentical

7、inbothcountries:ToyotavsChevy2.Manygoodsandservicesarenottraded:e.g.haircuts©2005PearsonEducationCanadaInc.19-8PPP:CanadaandU.S.19-9FactorsAffectingEinLongRunBasicPrinciple:Iffactorincreasesdemandfordomesticgoodsrelativetoforeigngoods,E©2005PearsonEducationCanadaInc.©2

8、005PearsonEducationCanadaInc.19-10ExpectedReturnsandInterestParityReforFrancoisAl$DepositsiD+(Eet+1–Et)/EtiDEu