Version actuelle datée du 8 avril 2020 à 18:24

International Macroeconomics: Issues and Overview

Données clés
Professeur(s)	Sbergami, Federica^[1]^[2]^[3] Céline Carrère^[4]^[5]^[6]^[7]^[8]^[9]
Cours	International Economy

Lectures

What is the field of study of international macroeconomics?

How does the foreign exchange market work?

What determines exchange rate fluctuations?

What information is derived from a country's Balance of Payments?

Policy choice: fixed vs. floating exchange rates?

What are the benefits of financial openness?

Languages

Español Français

Types of international transactions[modifier | modifier le wikicode]

Types of transactions between $H$ (Home) and $F$ (Foreign) :

(i) trade; e.g.

H

exports watches,

F

exports textiles.

(ii) capital exchanges; e.g.

H

acquires a title of

F

,

F

acquires a title of

H

.

(iii) inter-temporal trade; e.g.,

H

imports equipment from

F

and incurs debt in relation to

F

.

Basic motivation: arbitrage gains = exploitation of differences between countries.

The two approaches to exchanges[modifier | modifier le wikicode]

1) Real theory of trade (International Economy I)

Subject: real trade in goods or factors between countries.
Primarily micro-economic approach
Examples of questions: Gains from trade, redistributive consequences, protectionism
Examples of institutions: WTO, regional agreements (NAFTA, Single European Market...)

2) International payments (International Economy II)

Subject: International payments and the role of currency (exchange rates).
Primarily macro-economic approach (focuses on aggregate economic variables = countrywide)
Sample questions: Fixed versus floating exchange rates? Should we join a monetary union? Causes and consequences of financial crises?
Examples of institutions: ECB, IMF

Trade in goods: trade[modifier | modifier le wikicode]

A lot of trade within countries

35% of world trade is between developed countries

Growing importance of trade with Asia

Source: Feenstra and Taylor, 2011

Asset swaps: direct investment[modifier | modifier le wikicode]

FDI = foreign direct investment (multinationals)

Horizontal between rich countries (same sectors), vertical between rich countries and DCs

Essential FDI between developed countries (EU+USA = 55%), but growing Chinese FDI

Source: Feenstra and Taylor, 2011

Long-term development[modifier | modifier le wikicode]

Source: World Bank and own calculations (Federica Sbergami).
Source: World Bank and own calculations (Federica Sbergami).

Liberalization of capital flows[modifier | modifier le wikicode]

More liberalisation in the financial market and more financial transactions from the 1970s onwards, with some important differences between categories of countries.

Main topics covered[modifier | modifier le wikicode]

Two themes[modifier | modifier le wikicode]

Money/Currencies[modifier | modifier le wikicode]

There are many different currencies in use in the world today. The first part of our course is dedicated to understanding the implications of using different currencies and to understanding the mechanism of exchange rate determination. Obviously, in doing so we will not be able to ignore issues related to the international mobility of capital.

Economic policies[modifier | modifier le wikicode]

What is the role of governments today in an economic system characterized by strong integration? What room for manoeuvre is available to States in terms of economic policies? What choice of exchange rate regime? What decisions should be taken on the rules authorising or restricting the free movement of capital?

Exchange rates[modifier | modifier le wikicode]

EXCHANGE RATE = price of a foreign currency

As goods, services and investments cross borders, the exchange rate has a significant impact on the relative prices of domestic and foreign goods (cars or textiles), services (insurance or tourism) and assets (stocks or bonds).

Exchange rates affect the economy through 2 channels:

relative prices of goods (a shirt costs 45 EUR, a watch costs 75 CHF = 60 EUR at the exchange rate 1 EUR = 1.25 CHF => a watch is "worth" 1.33 shirts; if the exchange rate rises to 1.50 CHF per EUR, the relative shirt/watch price drops to 1.11 shirts per watch);
relative prices of assets (the Eurozone countries had about $200 billion of US assets at the end of 2002, i.e. 200 billion € (1$ = 1€ at the end of 2002); 1 year later, at the end of 2003, these assets are worth only $160 billion because the dollar has depreciated / the euro has appreciated (1$ = 0.8€).

It is important to understand the exchange rate fluctuations.

Two exchange rate regimes[modifier | modifier le wikicode]

FREE FLOATING EXCHANGE PLAN: the price of currencies is freely determined by supply and demand on the foreign exchange market → frequent fluctuations on a daily basis. Euro zone, United States, United Kingdom, Japan

FIXED EXCHANGE REGIME: monetary authorities undertake to maintain their exchange rate at a publicly announced parity (the official value of the national currency in terms of another currency) so the exchange rate is relatively stable... except for occasional readjustments! Denmark, Latvia and Lithuania peg their currencies to the Euro; China has pegged its currency, the yuan, to the US dollar.

EXCHANGE CRISIS: A sudden and very large loss in the value of a country's currency relative to other currencies after a period of stable exchange rates. Very important economic consequences, all the more so if the country is heavily dependent on imports and foreign capital.

Currency Crises[modifier | modifier le wikicode]

WHEN THE EXCHANGE RATE FLUCTUATES "TOO" MUCH..: Relatively frequent crises (24 crises between 1997 and 2009).

An exchange rate crisis can put a country in default (the country cannot honour its debt repayments).

Can also be associated, in extreme cases, with political and social instability (Argentina crisis in 2002).

Source: Feenstra-Taylor, 2008.

Financial Globalization[modifier | modifier le wikicode]

To understand the financial interactions between countries we need to use a framework comptable→ the PAYMENT BALANCE allows us to monitor how a country's indebtedness to the rest of the world evolves, the health of its industries subject to foreign competition, or to understand the links between foreign transactions and the supply of money (the very first part of our course).

Three notions:

Income: the amount earned by the factors of production in an economy.
Expenditure: how much is the economy spending on goods and services?
Current account: difference between Income and Expenditure, either in surplus (Income > Expenditure) => savings lent abroad, or deficit (Income < Expenditure) => financed by foreign loans.

EXTERNAL POSITION: the current account balance and capital gains/losses will change the credit or debit position of the country vis-à-vis the rest of the world.

Economic policies[modifier | modifier le wikicode]

ECONOMIC POLICIES are defined to achieve macroeconomic objectives, such as keeping inflation low, stabilising interest rates, mitigating the effects of a recession.

Key decisions to be taken by the government:

CHANGE SCHEME, which will influence the effectiveness of monetary and fiscal policies;
FREE MOVEMENT OF CAPITAL RULES and regulation of international finance, which will influence the inflow and outflow of capital and the volume of international financial transactions.

Countries differ in the quality of their choice of economic policies and in the quality of the institutional context in which policies are implemented. To study international macroeconomic interactions, it is essential to understand how this context affects the effectiveness of policies.

Résumé[modifier | modifier le wikicode]

International macroeconomics studies phenomena that relate to the economy as a whole (MACRO-economics), between interdependent economies (INTERNATIONAL).

Since the 1970s → general movement towards more financial liberalisation (gradual removal of restrictions on capital movements. This has led to an increase in the volume of international financial transactions.

Exchange rate fluctuations influence the economic system through two channels: relative prices of goods and relative prices of assets.

The balance of payments is the national accounts document that makes it possible to monitor the development of the country's international investment position.

The two main choices in terms of economic policy that the government has to make concern the choice of exchange rate regime (floating versus fixed) and the rules on the free movement of capital.

Annexes[modifier | modifier le wikicode]

References[modifier | modifier le wikicode]

[1] Page personnelle de Federica Sbergami sur le site de l'Université de Genève

[2] Page personnelle de Federica Sbergami sur le site de l'Université de Neuchâtel

[3] Page personnelle de Federica Sbergami sur Research Gate

[4] Céline Carrère - Faculté d'économie et de management - UNIGE

[5] Céline Carrère - Google Scholar Citations

[6] Director Céline Carrère - Rectorat - UNIGE

[7] Céline Carrère | Sciences Po - Le Laboratoire Interdisciplinaire d'Evaluation des Politiques Publiques (LIEPP)

[8] Céline Carrere - EconPapers

[9] Céline Carrère's research works - ResearchGate

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@@ Ligne 41 : / Ligne 41 : @@
 {{Translations
 | fr = Macroéconomie Internationale : enjeux et tour d'horizon
-| es =
+| es = Macroeconomía internacional: Cuestiones y panorama general
 }}
@@ Ligne 81 : / Ligne 81 : @@
 [[File:économie internationale échanges de biens commerce 2.png|thumb|center|Source: Feenstra and Taylor, 2011]]
-== Échanges d’actifs : investissement direct ==
+== Asset swaps: direct investment ==
-FDI = investissements directs étrangers (multinationales)
+FDI = foreign direct investment (multinationals)
-Horizontal entre pays riches (mêmes secteurs), vertical entre pays riches et PVDs
+Horizontal between rich countries (same sectors), vertical between rich countries and DCs
-Essentiel du FDI entre pays développés (EU+USA = 55%), mais FDI chinois croissant
+Essential FDI between developed countries (EU+USA = 55%), but growing Chinese FDI
 [[File:économie internationale échanges d’actifs investissement direct 1.png|thumb|center|Source: Feenstra and Taylor, 2011]]
-== Evolution à long terme ==
+== Long-term development ==
 <gallery mode="packed" widths=200px heights=200px>
-File:économie internationale type échange long terme 1.png|Source: World Bank et propres calculs (Federica Sbergami).
+File:économie internationale type échange long terme 1.png|Source: World Bank and own calculations (Federica Sbergami).
-File:économie internationale type échange long terme  2.png|Source: World Bank et propres calculs (Federica Sbergami).
+File:économie internationale type échange long terme  2.png|Source: World Bank and own calculations (Federica Sbergami).
 </gallery>
-== Libéralisation des flux de capitaux ==
+== Liberalization of capital flows ==
-Plus de libéralisation dans le marché financier et plus de transactions financières à partir des années 70s, avec quelques différences importantes entre catégories de pays.
+More liberalisation in the financial market and more financial transactions from the 1970s onwards, with some important differences between categories of countries.
 [[File:économie internationale libéralisation des flux de capitaux 1.png|thumb|center|]]
-= Principaux thèmes traités =
+= Main topics covered =
-== Deux thèmes ==
+== Two themes ==
-=== Monnaie/Devises ===
+=== Money/Currencies ===
-Il existe de nombreuses monnaies différentes qui sont utilisées dans le monde aujourd’hui. La première partie de notre cours est dédiée à comprendre quelles sont les implications de l'utilisation de monnaies différentes et à comprendre le mécanisme de détermination du taux de change. Evidemment, en faisant cela nous ne pourrons pas faire abstraction des questions liées à la mobilité internationale du capital.
+There are many different currencies in use in the world today. The first part of our course is dedicated to understanding the implications of using different currencies and to understanding the mechanism of exchange rate determination. Obviously, in doing so we will not be able to ignore issues related to the international mobility of capital.
-=== Politiques économiques ===
+=== Economic policies ===
-Quel est aujourd'hui, dans un système économique caractérisé par une forte intégration, le rôle pour les gouvernements ? Quelles sont les marges de manœuvre à disposition des États en termes de politiques économiques ? Quel choix de régime de change ? Quels décisions sur les règles autorisant ou restreignant la libre circulation des capitaux ?
+What is the role of governments today in an economic system characterized by strong integration? What room for manoeuvre is available to States in terms of economic policies? What choice of exchange rate regime? What decisions should be taken on the rules authorising or restricting the free movement of capital?
-== Taux de change ==
+== Exchange rates ==
-:::::TAUX DE CHANGE = prix d’une devise étrangère
+:::::EXCHANGE RATE = price of a foreign currency
-Comme les biens, les services, les investissements traversent les frontières, le taux de change a un impact important sur les prix relatifs des biens domestiques et étrangers (auto ou textile), des services (assurance ou tourisme) et des actifs (actions ou obligations).
+As goods, services and investments cross borders, the exchange rate has a significant impact on the relative prices of domestic and foreign goods (cars or textiles), services (insurance or tourism) and assets (stocks or bonds).
-Les taux de change affectent l’économie via 2 canaux :
+Exchange rates affect the economy through 2 channels:
-*les prix relatifs des biens (une chemise coûte 45 EUR, une montre coûte 75 CHF = 60 EUR au taux de change 1 EUR = 1.25 CHF => une montre "vaut" 1.33 chemises; si le taux de change passe à 1.50 CHF par EUR, le prix relatif chemise/montre baisse à 1.11 chemises par montre);
+*relative prices of goods (a shirt costs 45 EUR, a watch costs 75 CHF = 60 EUR at the exchange rate 1 EUR = 1.25 CHF => a watch is "worth" 1.33 shirts; if the exchange rate rises to 1.50 CHF per EUR, the relative shirt/watch price drops to 1.11 shirts per watch);
-*les prix relatifs des actifs (les pays de l’Eurozone possédaient environ 200 milliards de $ d’actifs américains fin 2002 soit 200 milliards d’€ (1$ = 1€ fin 2002); 1 année plus tard, fin 2003, ces actifs ne valent plus que 160 milliards de $ car le dollar s’est déprécié / l’euro s’est apprécié (1$ = 0.8€).
+*relative prices of assets (the Eurozone countries had about $200 billion of US assets at the end of 2002, i.e. 200 billion € (1$ = 1€ at the end of 2002); 1 year later, at the end of 2003, these assets are worth only $160 billion because the dollar has depreciated / the euro has appreciated (1$ = 0.8€).
-Important de comprendre les fluctuations du taux de change.
+It is important to understand the exchange rate fluctuations.
-== Deux régimes de change ==
+== Two exchange rate regimes ==
-RÉGIME DE CHANGE FLOTTANT : le prix des devises est librement déterminé par l’offre et la demande sur le marché des changes → fluctuations fréquentes sur une base journalière. Zone Euro, Etats-Unis, Royaume-Unis, Japon
+FREE FLOATING EXCHANGE PLAN: the price of currencies is freely determined by supply and demand on the foreign exchange market → frequent fluctuations on a daily basis. Euro zone, United States, United Kingdom, Japan
-RÉGIME DE CHANGE FIXE : les autorités monétaires entreprennent de maintenir leur cours de change à une parité annoncée publiquement (valeur officielle de la monnaie nationale en termes d’une autre monnaie) donc le taux de change est relativement stable... au réajustement occasionnel près! Danemark, Lettonie, Lituanie arriment leurs monnaies à l’Euro; la Chine a arrimé le cours de sa monnaie, le yuan, au dollar américain
+FIXED EXCHANGE REGIME: monetary authorities undertake to maintain their exchange rate at a publicly announced parity (the official value of the national currency in terms of another currency) so the exchange rate is relatively stable... except for occasional readjustments! Denmark, Latvia and Lithuania peg their currencies to the Euro; China has pegged its currency, the yuan, to the US dollar.
-CRISES DE CHANGE : perte soudaine et très importante de la valeur de la monnaie d'un pays relativement aux autres monnaies après une période de taux de change stables. Conséquences économiques très importantes, d’autant plus si le pays dépend fortement des ses importations et des capitaux étrangers.
+EXCHANGE CRISIS: A sudden and very large loss in the value of a country's currency relative to other currencies after a period of stable exchange rates. Very important economic consequences, all the more so if the country is heavily dependent on imports and foreign capital.
-== Crises de change ==
+== Currency Crises ==
-QUAND LE TAUX DE CHANGE FLUCTUE "TROP"...:
+WHEN THE EXCHANGE RATE FLUCTUATES "TOO" MUCH..:
-Crises relativement fréquentes (24 crises entre 1997 et 2009).
+Relatively frequent crises (24 crises between 1997 and 2009).
-Une crise de change peut mettre un pays en défaut (le pays ne peut honorer les remboursements de sa dette).
+An exchange rate crisis can put a country in default (the country cannot honour its debt repayments).
-Peut aussi être associée, dans les cas extrêmes, à l’instabilité politique et sociale (crise Argentine en 2002)
+Can also be associated, in extreme cases, with political and social instability (Argentina crisis in 2002).
-[[File:économie internationale crise de change 1.png|thumb|center|
+[[File:économie internationale crise de change 1.png|thumb|center|Source: Feenstra-Taylor, 2008.]]
-Source: Feenstra-Taylor, 2008.]]
-== Globalisation financière ==
+== Financial Globalization ==
-Pour comprendre les interactions financières entre les pays nous devons utiliser un cadre comptable→ la BALANCE DES PAIEMENTS permet de suivre comment évoluent l’endettement d’un pays vis-à-vis du reste du monde, la santé de ses industries soumises à la concurrence étrangère, ou encore de comprendre les liens être les transactions étrangères et l’offre de monnaie (toute première partie de notre cours).
+To understand the financial interactions between countries we need to use a framework comptable→ the PAYMENT BALANCE allows us to monitor how a country's indebtedness to the rest of the world evolves, the health of its industries subject to foreign competition, or to understand the links between foreign transactions and the supply of money (the very first part of our course).
-Trois notions:
+Three notions:
-#Revenus: montant gagné par les facteurs de production d’une économie
+#Income: the amount earned by the factors of production in an economy.
-#Dépenses: combien l’économie dépense-t-elle en biens et service
+#Expenditure: how much is the economy spending on goods and services?
-#Compte courant: différence entre les Revenus et Dépenses, soit en excèdent (Revenus > Dépenses) => épargne prêtée à l’étranger, soit déficit (Revenus < Dépenses) => financé par des emprunts à l’étranger.
+#Current account: difference between Income and Expenditure, either in surplus (Income > Expenditure) => savings lent abroad, or deficit (Income < Expenditure) => financed by foreign loans.
-POSITION EXTÉRIEURE : le solde du compte courant ainsi que les gains/pertes en capital vont modifier la position créditrice ou débitrice du pays vis-à-vis du reste du monde.
+EXTERNAL POSITION: the current account balance and capital gains/losses will change the credit or debit position of the country vis-à-vis the rest of the world.
-== Politiques économiques ==
+== Economic policies ==
-Les POLITIQUES ÉCONOMIQUES sont définies pour atteindre des objectifs macroéconomiques, comme maintenir l’inflation basse, stabiliser les taux d’intérêt, atténuer les effets d’une récession.
+ECONOMIC POLICIES are defined to achieve macroeconomic objectives, such as keeping inflation low, stabilising interest rates, mitigating the effects of a recession.
-Principales décisions que le gouvernement doit prendre:
+Key decisions to be taken by the government:
-*CHOIX DU RÉGIME DE CHANGE, qui va influencer l'efficacité des politiques monétaires et budgétaires;
+*CHANGE SCHEME, which will influence the effectiveness of monetary and fiscal policies;
-*RÈGLES SUR LA LIBRE CIRCULATION DES CAPITAUX et régulation de la finance internationale, qui vont influencer les flux entrants et sortants des capitaux et le volume des transactions financières internationales.
+*FREE MOVEMENT OF CAPITAL RULES and regulation of international finance, which will influence the inflow and outflow of capital and the volume of international financial transactions.
-Les pays différent dans la qualité de leur choix de politiques économiques et dans la qualité du contexte institutionnel dans lequel les politiques sont mises en place. Pour étudier les interactions macroéconomiques internationales il est essentiel de comprendre comment ce contexte joue sur l’efficacité des politiques.
+Countries differ in the quality of their choice of economic policies and in the quality of the institutional context in which policies are implemented. To study international macroeconomic interactions, it is essential to understand how this context affects the effectiveness of policies.
 = Résumé =
-La macroéconomie internationale étudie les phénomènes qui ont trait à l’économie dans son ensemble (MACRO-économie), entre des économies interdépendantes (INTERNATIONALE).
+International macroeconomics studies phenomena that relate to the economy as a whole (MACRO-economics), between interdependent economies (INTERNATIONAL).
-Depuis les années 1970s → mouvement général vers plus de libéralisation financière (élimination progressive des restrictions aux mouvements de capitaux. Il en découle une augmentation du volume des transactions financières internationales.
+Since the 1970s → general movement towards more financial liberalisation (gradual removal of restrictions on capital movements. This has led to an increase in the volume of international financial transactions.
-Les fluctuations du taux de change influencent le système économiques via deux canaux: les prix relatifs des biens et les prix relatifs des actifs.
+Exchange rate fluctuations influence the economic system through two channels: relative prices of goods and relative prices of assets.
-La balance des paiements est le document de comptabilité nationale qui permet de suivre l'évolution de la position extérieure du pays.
+The balance of payments is the national accounts document that makes it possible to monitor the development of the country's international investment position.
-Les deux choix principales en termes de politique économique que le gouvernement doit prendre concernent le choix du régime de change (flottant versus fixe) et les règles sur la libre circulation des capitaux.
+The two main choices in terms of economic policy that the government has to make concern the choice of exchange rate regime (floating versus fixed) and the rules on the free movement of capital.
 = Annexes =

« International Macroeconomics: Issues and Overview » : différence entre les versions

Version actuelle datée du 8 avril 2020 à 18:24

Sommaire

Types of international transactions[modifier | modifier le wikicode]