《国际经济学》教师手册及课后习题答案克鲁格曼第六版imch13.docx

1、国际经济学教师手册及课后习题答案克鲁格曼第六版imch13HAPTER 13 Exchange Rates and the Foreign Exchange Market: An Asset Approach Chapter OrganizationExchange Rates and International TransactionsDomestic and Foreign PricesExchange Rates and Relative PricesBox: A Tale of Two DollarsThe Foreign Exchange MarketThe ActorsCharac

2、teristics of the MarketSpot Rates and Forward RatesForeign Exchange SwapsFutures and OptionsThe Demand for Foreign Currency AssetsAssets and Asset ReturnsRisk and LiquidityInterest RatesExchange Rates and Asset ReturnsA Simple RuleReturn, Risk, and Liquidity in the Foreign Exchange MarketEquilibrium

3、 in the Foreign Exchange MarketInterest Parity: The Basic Equilibrium ConditionHow Changes in the Current Exchange Rate Affect Expected ReturnsThe Equilibrium Exchange RateInterest Rates, Expectations, and EquilibriumThe Effect of Changing Interest Rates on the Current Exchange RateThe Effect of Cha

4、nging Expectations on the Current Exchange RateBox: The Perils of Forecasting Exchange RatesSummaryAppendix: Forward Exchange Rates and Covered Interest ParityChapter Overview The purpose of this chapter is to show the importance of the exchange rate in translating foreign prices into domestic value

5、s as well as to begin the presentation of exchange-rate determination. Central to the treatment of exchange-rate determination is the insight that exchange rates are determined in the same way as other asset prices. The chapter begins by describing how the relative prices of different countries good

6、s are affected by exchange rate changes. This discussion illustrates the central importance of exchange rates for cross-border economic linkages. The determination of the level of the exchange rate is modeled in the context of the exchange rates role as the relative price of foreign and domestic cur

7、rencies, using the uncovered interest parity relationship.The euro is used often in examples. Some students may not be familiar with the currency or aware of which countries use it; a brief discussion may be warranted. A full treatment of EMU and the theories surrounding currency unification appears

8、 in Chapter 20.The description of the foreign-exchange market stresses the involvement of large organizations (commercial banks, corporations, nonbank financial institutions, and central banks) and the highly integrated nature of the market. The nature of the foreign-exchange market ensures that arb

9、itrage occurs quickly, so that common rates are offered worldwide. Forward foreign-exchange trading, foreign-exchange futures contracts and foreign-exchange options play an important part in currency market activity. The use of these financial instruments to eliminate short-run exchange-rate risk is

10、 described. The explanation of exchange-rate determination in this chapter emphasizes the modern view that exchange rates move to equilibrate asset markets. The foreign-exchange demand and supply curves that introduce exchange-rate determination in most undergraduate texts are not found here. Instea

11、d, there is a discussion of asset pricing and the determination of expected rates of return on assets denominated in different currencies. Students may already be familiar with the distinction between real and nominal returns. The text demonstrates that nominal returns are sufficient for comparing t

12、he attractiveness of different assets. There is a brief description of the role played by risk and liquidity in asset demand, but these considerations are not pursued in this chapter. (The role of risk is taken up again in Chapter 17.)Substantial space is devoted to the topic of comparing expected r

13、eturns on assets denominated in domestic and foreign currency. The text identifies two parts of the expected return on a foreign-currency asset (measured in domestic-currency terms): the interest payment and the change in the value of the foreign currency relative to the domestic currency over the p

14、eriod in which the asset is held. The expected return on a foreign asset is calculated as a function of the current exchange rate for given expected values of the future exchange rate and the foreign interest rate. The absence of risk and liquidity considerations implies that the expected returns on

15、 all assets traded in the foreign-exchange market must be equal. It is thus a short step from calculations of expected returns on foreign assets to the interest parity condition. The foreign-exchange market is shown to be in equilibrium only when the interest parity condition holds. Thus, for given

16、interest rates and given expectations about future exchange rates, interest parity determines the current equilibrium exchange rate. The interest parity diagram introduced here is instrumental in later chapters in which a more general model is presented. Since a command of this interest parity diagram is an important building block for future work, we recommend drills that employ this diagram.The result that a doll