Transcript Dia 1

International Economics: Theory, Application, and Policy, Ch. 20;  Charles van Marrewijk, 2006
Figure 20.1 Karl Gustav Cassel (1866-1945)
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International Economics: Theory, Application, and Policy, Ch. 20;  Charles van Marrewijk, 2006
Figure 20.2 Different versions of the Law of One Price and PPP*
* Some qualifications for the implication arrows may apply, see the main text for details.
absolute
Law of One Price
individual goods
implies
implies
absolute PPP
= absolute Law of
One Price for
price index
relative
Law of One Price
individual goods
implies
implies
relative PPP
= relative Law of
One Price
for price index
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International Economics: Theory, Application, and Policy, Ch. 20;  Charles van Marrewijk, 2006
Figure 20.3 Exchange rates and prices, 1960-2001
US $ exchange rates and consumer prices, 1960-2001
21
Peru
(pcj,2001-pcj,1960)-(pUS,2001-pUS,1960)
18
Uruguay
15
Bolivia
12
9
Sudan
6
3
0
-3
0
-3
3
6
9
12
s 2001 -s 1960
15
18
21
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International Economics: Theory, Application, and Policy, Ch. 20;  Charles van Marrewijk, 2006
Figure 20.4 Basic econometrics: observations and lines
Basic econometrics
observations
variable y
10
5
objective: draw straight line such that the sum of distance
from observations (dots) to straight line is 'minimized'
0
0
5
variable x
10
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International Economics: Theory, Application, and Policy, Ch. 20;  Charles van Marrewijk, 2006
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Figure 20.5 5 US dollar: trade weights (top six) and competitiveness weights
a. US; trade weights, percent of total
20
Euro area
Japan
Canada
15
Japan
10
Mexico
China
5
0
1975
UK
1980
1985
1990
1995
2000
year
International Economics: Theory, Application, and Policy, Ch. 20;  Charles van Marrewijk, 2006
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Figure 20.5 5 US dollar: trade weights (top six) and competitiveness weights
b. US; third-market competitiveness weights
Euro area
25
20
Japan
15
UK
10
China
5
0
1975
Canada
1980
Mexico
1985
1990
1995
2000
year
International Economics: Theory, Application, and Policy, Ch. 20;  Charles van Marrewijk, 2006
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Figure 20.6 US dollar: real effective exchange rates
b. US; effective exchange rates, major
a. US; effective exchange rates, broad
150
150
real
nominal
nominal
120
120
90
90
real
60
60
30
30
0
0
1975
1980
1985
1990
1995
2000
2005
1975
1980
1985
1990
1995
2000
2005
International Economics: Theory, Application, and Policy, Ch. 20;  Charles van Marrewijk, 2006
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Figure 20.6 US dollar: real effective exchange rates
c. US dollar; real effective exchange rates, index (monthly)
135
125
115
105
broad currencies
95
85
major currencies
75
1975
1985
1995
2005
International Economics: Theory, Application,
and Policy,
20; indices
Charles van Marrewijk, 2006
Weights
in theCh.
EER-23
Figure 20.7
Euro:
effective
index
weights,
EER-23
USA
UK
Japan
China
Switzerland
Sweden
S. Korea
Poland
Singapore
Czech Rep.
Hungary
Denmark
Hong Kong
Canada
Norway
Australia
Slovakia
Slovenia
Estonia
Lithuania
Cyprus
Malta
Latvia
0
4
8
12
reference period 1995-1997
16
20
24
reference period 1999-2001
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International Economics: Theory, Application, and Policy, Ch. 20;  Charles van Marrewijk, 2006
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Figure 20.8 Euro: nominal and real effective exchange rates
Euro; effective exchange rate, index (1999 Q1 =100)
125
real (monthly)
100
nominal (daily)
75
50
25
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 year
International Economics: Theory, Application, and Policy, Ch. 20;  Charles van Marrewijk, 2006
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Figure 20.9 Exchange and prices under extreme circumstances
Bolivia; exchange rate (pesos per US dollar) and price level
(index, 1982 = 1), logarithmic scale
10,000,000
exchange rate
1,000,000
100,000
10,000
price level
1,000
100
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Jan-84
Apr-84 Aug-84 Nov-84 Feb-85 Jun-85 Sep-85 Dec-85
International Economics: Theory, Application, and Policy, Ch. 20;  Charles van Marrewijk, 2006
Figure 20.10 Gross domestic product;top 20, ranked according to PPP, 2003
GDP top 20; ranked according to PPP, 2003 (current $, billions)
10,978
United States
6,410
China
3,629
Japan
3,062
India
2,279
Germany
France
1,652
Un. Kingdom
1,643
1,546
Italy
Brazil
1,326
Russia
1,284
Canada
950
Mexico
919
Spain
910
Korea, Rep.
862
689
Indonesia
current $
572
Australia
Turkey
475
Iran
465
South Africa
464
Netherlands
463
0
2,000
4,000
6,000
8,000
current $, PPP
10,000
12,000
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