Chapter 31
Basic Concepts of Open Economy Macroeconomics
trade can make better off
everyone
Open economy economy that interacts freely wish other
economies all over the world
Factors that might influence expern impern and NX
consumers preferences forforeign domestic goods
prices of goods at home abroad
exchange raten
incomes
transportation earn
government policies
Trade Surplus IN Xt Trade Deficit NX
INSET
Y DienenSpending Y DienenSpending
Ct It G Ct It G
5 I S I
Neo o N o
Balanced Trade E M NX o
Net Capital Outflow NW
II
, Purchase of foreign assets bydomestic residents
Nee
Purchase of domestic amen by foreigners
N so capital outflow
NW O Capital inflow
Variablen to Influence NW
real interest rates paid on domestic foreign assets
perceived risks of holding foreign amen
government policies affecting foreign ownership of dem einen
the men important
Neo N
accounting policy in maeroeeon
Every transition that affects NX also affects NW vice versa
Open economy Y Ct It Gt NX
National saving S Y C G
Y C G It NX
Sz It NX
NX NW
9 It NEO
Saving Domestic Investment t Net capital outflow
Basic Concepts of Open Economy Macroeconomics
trade can make better off
everyone
Open economy economy that interacts freely wish other
economies all over the world
Factors that might influence expern impern and NX
consumers preferences forforeign domestic goods
prices of goods at home abroad
exchange raten
incomes
transportation earn
government policies
Trade Surplus IN Xt Trade Deficit NX
INSET
Y DienenSpending Y DienenSpending
Ct It G Ct It G
5 I S I
Neo o N o
Balanced Trade E M NX o
Net Capital Outflow NW
II
, Purchase of foreign assets bydomestic residents
Nee
Purchase of domestic amen by foreigners
N so capital outflow
NW O Capital inflow
Variablen to Influence NW
real interest rates paid on domestic foreign assets
perceived risks of holding foreign amen
government policies affecting foreign ownership of dem einen
the men important
Neo N
accounting policy in maeroeeon
Every transition that affects NX also affects NW vice versa
Open economy Y Ct It Gt NX
National saving S Y C G
Y C G It NX
Sz It NX
NX NW
9 It NEO
Saving Domestic Investment t Net capital outflow
