mankiw's macroeconomics modules A PowerPointTutorial to Accompany macroeconomics, 5th ed. N. Gregory Mankiw ® BAB 12 Permintaan Agregat dalam Perekonomian Terbuka

Analisis AD dengan memasukkan perdagangan dan keuangan internasional. Model Mundell-Fleming (MF) : versi perekonomian terbuka dari model IS-LM Asumsi model MF/IS-LM: tingkat harga tetap, apa yang menyebabkan fluktuasi jk pendek dlm AD

Asumsi penting model MF: Perekonomian terbuka kecil dengan modal mobilitas sempurna. tingkat bunga ekonomi domestik ditentukan tingkat bunga dunia * bisa memusatkan perhatian pada peran kurs.

MODEL MUNDELL-FLEMING Asumsi r = r* Tingkat bunga dunia tetap secara eksogen Mis. Jk pendek r naik sedikit, maka pihak asing akan mulai memberi pinjaman. Akhirnya bunga domestik kembali menuju r*.

Pasar Barang dan Kurva IS* Y = C(Y-T) + I(r*) + G + NX(e) Ekspor neto berhub negative dengan kurs e. e = jumlah mata uang asing per unit mata uang domestik. Mis e adalah 9200 rupiah per dolar US

Kurs riil : harga relatif dari barang2 di dalam dan LN Kurs nominal : harga relatif dari mata uang domestik dan asing Jika e = kurs nominal, maka Kurs riil Є = eP/P* (P= harga domestik, P* harga LN)

Asumsi Model MF : tingkat harga dalam dan LN tetap. Maka kurs riil proporsional terhadap kurs nominal. Misal kurs nominal berapresiasi, barang LN menjadi lebih murah, maka ekspor turun, impor naik. (grafik 12.1)

Gbr 12.1 e E Y=AE Planned Expenditure, E = C + I + G + NX Y r NX IS Y

Ket Gambar 12.1 Kurva IS* miring ke bawah karena kurs yang lebih tinggi, mengurangi ekspor neto, menurunkan Y. kenaikan kurs mengurangi ekspor neto penurunan NX, menggeser pengeluaran yg direncanakan ke bawah → menurunkan Y Kurva IS* meringkas hub r dan Y

Pasar Uang dan Kurva LM* M/P = L (r*, Y) Keseimbangan uang riil M/P sama dengan permintaan, L(r*, Y) M var eksogen, dikendalikan bank sentral Jangka pendek, maka P tetap secara eksogen

Persamaan LM* : menentukan pendapatan agregat tanpa pertimbangan kurs Gbr 12.2 LM* e Income, Output, Y

Merakit Bagian Model Y = C(Y-T) + I(r*) + G + NX(e) IS* M/P = L (r*, Y) LM* Var eksogen : G, T, M, P, r* Var endogen : Y dan kurs e

Gbr 12.3Ekuilibrium menunjukkan kurs dan tingkat pendapatan di mana pasar barang & pasar uang dalam ekuilibrium LM* e IS Income, Output, Y

KURS MENGAMBANG (floating exchange rates) Kurs dibiarkan berfluktuasi dengan bebas untuk menanggapi kondisi ekonomi yang sedang berubah

Kebijakan Fiskal Gbr 12.4 LM e IS2 IS1 Y

Keterangan Gbr 12.4 Peningkatan G atau penurunan T : begitu r > r*, maka modal LN masuk → permintaan uang meningkat → nilai mata uang domestik naik → kurs mata uang domestic relative mahal terhadap produk asing → mengurangi ekspor neto → mengoffset dampak ekspansioner pendapatan

Kebijakan Moneter Meningkatkan jumlah uang beredar kenaikan → keseimbangan uang riil → menggeser LM* M naik → modal mengalir keluar → kurs mengalami depresiasi → ekspor neto meningkat → pendapatan↑ Jadi meningkatkan pendapatan dan menurunkan kurs

Gbr 12.5. e LM2 LM1 IS Y

Kebijakan Perdagangan Gbr 12.6.

Pemberlakuan kuota impor/tariff brg impor Berarti kenaikan ekspor neto (a) → meningkatkan pengeluaran yang direncanakan → menggeser IS ke kanan → tidak mempengaruhi pendapatan. Karena tidak mempengaruhi Y, C, I, G, hambatan perdagangan tidak mempengaruhi neraca perdagangan. Jadi pergeseran ekspor neto NX, kenaikan kurs mengurangi NX dalam jumlah yang sama

KURS TETAP (fixed exchange rates) Bank sentral siap membeli atau menjual mata uang domestic untuk mata uang asing pada harga yang telah ditetapkan sebelumnya. Tujuan : mempertahankan kurs pada tingkat yang telah diumumkan, jumlah uang yang beredar menyesuaikan berapapun kurs yang menjamin kurs ekuilibrium.

Gbr 12.7.

Kurs ekuilibrium > tingkat tetapnya → pialang akan membeli mata uang asing, menjualnya pada BI untuk mendapatkan laba → meningkatkan jumlah uang beredar → menggeser LM* ke kanan → menurunkan kurs. Demikian sebaliknya.

Kebijakan fiskal Pada Fixed ER G↑ atau T↓ → IS* naik ke kanan. Jumlah uang beredar ditingkatkan, untuk mempertahankan kurs, melalui pialang yang menjual mata uang asing ke bank sentra → LM* ke kanan → Y meningkat

Gbr 12.8 Kebijakan Fiskal

Kebijakan Moneter Pada Fixed ER Misal meningkatkan jumlah uang beredar, LM* bgeser tapi bank sentral akan membuat LM* kembali. Dengan menyepakati kurs tetap, bank sentral meningkatkan kontrolnya atas jumlah uang beredar.

Gbr 12.9. Kebijakan moneter

Negara bisa mengubah tingkat kurs tetap Penurunan nilai mata uang : devaluasi (LM* kekanan) Kenaikan nilai mata uang : revaluasi (LM* kekiri)

Kebijakan Perdagangan Gbr 12.10

Mengurangi impor/kuota → NX bertambah → IS Mengurangi impor/kuota → NX bertambah → IS* ke kanan, cenderung menaikkan kurs. Agar kurs tetap, jumlah uang beredar harus naik → LM* ke kanan. Jasi ekspor neto meningkat, karena mendorong ekspansi moneter (bukan apresiasi kurs). Akhirnya meningkatkan pendapatan agregat. NX = S – I Pendapatan ↑, tabungan ↑, menunjukkan NX ↑

Model MF Dampak kebijakan (mempengaruhi pendapatan) tergantung apakah dalam kondisi kurs mengambang atau kurs tetap. Kurs mengambang : kebijakan moneter Kurs tetap : kebijakan fiskal

Tabel 12.1. Ringkasan Dampak Kebijakan Rezim Kurs Mengambang Tetap berdampak pada Y e NX Y e NX Kebijakan Fiskal 0 ↑ ↓ ↑ 0 0 Ekspansi moneter ↑ ↓ ↑ 0 0 0 Hambatan impor 0 ↑ 0 ↑ 0 ↑

PERBEDAAN TINGKAT – BUNGA Asumsi : tingkat bunga r = r* Diperluas : sebab dan dampak perbedaan tingkat bunga internasional Dengan r = r*, maka mobilitas dana ke luar – masuk. Kenapa tidak selalu berjalan? Alasan 1: Resiko Negara / resiko politik Alasan 2: Ekspektasi kurs

Memasukkan perbedaan tingkat bunga dlm model Mundel Fleming R = r* + θ (θ = premi tingkat resiko) Misal kemelut politik, premi resiko naik → r bunga domestik naik ; memiliki 2 dampak : - Kurva IS* bergeser ke kiri (investasi turun) -Kurva LM* bergeser ke atas karena permintaan uang turun pendapatan naik (krn ekspor neto) Akibatnya: pendapatan naik, mata uang terdepresiasi

In the other words… Jadi ekspektasi bahwa mata uang akan kehilangan nilainya di masa depan menyebabkan mata uang itu kehilangan nilainya pada saat ini. (terdepresiasi)

Gbr 12.11.

Apa benar pendapatan naik? Kenyataan: Tidak! Bank sentral menurunkan jumlah uang beredar utk mengurangi depresiasi mata uang Barang impor yang mahal akan meningkatkan P Premi resiko yang naik, permintaan uang meningkat, LM* bergeser ke kiri Ketiga perubahan: menggeser LM ke kiri.

Jadi kenaikan resiko pada Negara tidak dikehendaki. Jangka pendek : - mata uang terdepresiasi - pendapatan menurun Jangka panjang: tingkat bunga tinggi mengurangi investasi, pertumbuhan ekonomi lebih renda

Apakah pilihan kurs mengambang atau tetap? Jarang kurs yang seutuhnya tetap atau mengambang Indonesia : nilai tukar mengambang terkendali Kurs mengambang : +Kebijakan moneter dapat digunakan utk tujuan lain misal menstabilkan kesempatan kerja atau harga Kurs tetap: +Kepastian perdagangan internasional +Mendisiplinkan pemegang otoritas moneter negara

Model MF dengan Perubahan Tingkat Harga Gbr 12.12 menunjukkan ketika harga turun LM* LM* e IS* Income, Output,Y P AD Income, Output,Y

Gbr 12.12 Harga turun → LM* bergeser ke kanan → menurunkan kurs riil → pendapatan naik (gbr a) AD : hub negatif antara P dan Y (gbr b)

Gbr 12.13. Ekuilibrium Jk pendek dan Jk panjang

K : ekuilibrium jk pendek. Permintaan rendah, tingkat harga turun. Keseimbangan uang riil LM* bergeser ke kanan. Kurs terdepresiasi, ekspor neto naik, sehingga jangka panjang titik C, perekonomian alamiah.

SEkian dan Terima Kasih

The Mundell-Fleming Model Introducing… The Mundell-Fleming Model e LM* Equilibrium exchange rate IS* Income, Output, Y Equilibrium Income

Building the Mundell-Fleming Model Start with these two equations: IS*: Y = C(Y-T) + I(r*) + G + NX(e) LM*: M/P = L (r*,Y) Assumption 1: The domestic interest rate is equal to the world interest rate (r = r*). Assumption 2: The price level is exogenously fixed since the model is used to analyze the short run (P). This implies that the nominal exchange rate is proportional to the real exchange rate. Assumption 3: The money supply is also set exogenously by the central bank (M). Assumption 4: Our LM* curve will be vertical because the exchange rate does not enter into our LM* equation.

Deriving the Mundell-Fleming IS* Curve The Keynesian Cross An increase in the exchange rate, lowers net exports, which shifts planned expenditure downward and lowers income. The IS* curve summarizes these changes in the goods market equilibrium. (c) E Y=E Planned Expenditure, E = C + I + G + NX Income, Output, Y (a) (b) e The NX Schedule r The IS* Curve NX(e) IS* Net Exports, NX Income, Output, Y

Deriving the Mundell-Fleming LM* Curve The LM Curve r LM The LM curve and the world interest rate together determine the level of income. r = r* Income, Output, Y The LM* Curve e LM* Income, Output, Y

The Mundell-Fleming Model Under Floating Exchange Rates Expansionary Monetary Policy Expansionary Fiscal Policy e LM* LM*' e LM* +DG, or –DT  +De, no DY +DM  -De, +DY IS*' IS* IS* Income, Output, Y Income, Output, Y When income rises in a small open economy, due to the fiscal expansion, the interest rate tries to rise but capital inflows from abroad put downward pressure on the interest rate.This inflow causes an increase in the demand for the currency pushing up its value and thus making domestic goods more expensive to foreigners (causing a –DNX). The –DNX offsets the expansionary fiscal policy and the effect on Y. When the increase in the money supply puts downward pressure on the domestic interest rate, capital flows out as investors seek a higher return elsewhere. The capital outflow prevents the interest rate from falling. The outflow also causes the exchange rate to depreciate making domestic goods less expensive relative to foreign goods, and stimulates NX. Hence, monetary policy influences the e rather than r.

The Mundell-Fleming Model Under Fixed Exchange Rates Expansionary Monetary Policy Expansionary Fiscal Policy +DG, or –DT + DY +DM  no DY e LM* e LM* LM*' IS*' IS* IS* Income, Output, Y Income, Output, Y A fiscal expansion shifts IS* to the right. To maintain the fixed exchange rate, the Fed must increase the money supply, thus increasing LM* to the right. Unlike the case with flexible exchange rates, there is no crowding out effect on NX due to a higher exchange rate. If the Fed tried to increase the money supply by buying bonds from the public, that would put down- ward pressure on the interest rate. Arbitragers respond by selling the domestic currency to the central bank, causing the money supply and the LM curve to contract to their initial positions.

Exchange Rate Conclusions Floating Exchange Rates Fixed vs. Floating Exchange Rate Conclusions Fixed Exchange Rates Floating Exchange Rates Fiscal Policy is Powerful. Monetary Policy is Powerless. Fiscal Policy is Powerless. Monetary Policy is Powerful. Hint: (Fixed and Fiscal sound alike). Hint: (Think of floating money.) The Mundell-Fleming model shows that fiscal policy does not influence aggregate income under floating exchange rates. A fiscal expansion causes the currency to appreciate, reducing net exports and offsetting the usual expansionary impact on aggregate demand. The Mundell –Fleming model shows that monetary policy does not influence aggregate income under fixed exchange rates. Any attempt to expand the money supply is futile, because the money supply must adjust to ensure that the exchange rate stays at its announced level.

Policy in the Mundell-Fleming Model: A Summary The Mundell-Fleming model shows that the effect of almost any economic policy on a small open economy depends on whether the exchange rate is floating or fixed. The Mundell-Fleming model shows that the power of monetary and fiscal policy to influence aggregate demand depends on the exchange rate regime.

Interest Rate Differentials What if the domestic interest rate were above the world interest rate? The higher return will attract funds from the rest of the world, driving the US interest rate back down. And, if the interest rate were below the world interest rate, domestic residents would lend abroad to earn a higher return, driving the domestic interest rate back up. In the end, the domestic interest rate would equal the world interest rate.

Country Risk and Exchange Rate Expectations Why doesn’t this logic always apply? There are two reasons why interest rates differ across countries: 1) Country Risk: when investors buy US government bonds, or make loans to US corporations, they are fairly confident that they will be repaid with interest. By contrast, in some less developed countries, it is plausible to fear that political upheaval may lead to a default on loan repayments. Borrowers in such countries often have to pay higher interest rates to compensate lenders for this risk. 2) Exchange Rate Expectations: suppose that people expect the French franc to fall in value relative to the US dollar. Then loans made in francs will be repaid in a less valuable currency than loans made in dollars. To compensate for the expected fall in the French currency, the interest rate in France will be higher than the interest rate in the US.

Differentials in the Mundell-Fleming Model To incorporate interest-rate differentials into the Mundell-Fleming model, we assume that the interest rate in our small open economy is determined by the world interest rate plus a risk premium q. r = r* + q The risk premium is determined by the perceived political risk of making loans in a country and the expected change in the real interest rate. We’ll take the risk premium q as exogenously determined. For any given fiscal policy, monetary policy, price level, and risk premium, these two equations determine the level of income and exchange rate that equilibrate the goods market and the money market. IS*: Y = C(Y-T) + I(r* + q) + G + NX(e) LM*: M/P = L (r* + q,Y)

Now suppose that political turmoil causes the country’s risk premium q to rise. The most direct effect is that the domestic interest rate r rises. The higher interest rate has two effects: 1) IS* curve shifts to the left, because the higher interest rate reduces investment. 2) LM* shifts to the right, because the higher interest rate reduces the demand for money, and this allows a higher level of income for any given money supply. These two shifts cause income to rise and thus push down the equilibrium exchange rate on world markets. The important implication: expectations of the exchange rate are partially self-fulfilling. For example, suppose that people come to believe that the French franc will not be valuable in the future. Investors will place a larger risk premium on French assets: q will rise in France. This expectation will drive up French interest rates and will drive down the value of the French franc. Thus, the expectation that a currency will lose value in the future causes it to lose value today. The next slide will demonstrate the mechanics.

An Increase in the Risk Premium Is this really is where the economy ends up? In the next slide, we’ll see that increases in country risk are not desirable. e LM* LM*' IS* IS*' Income, Output, Y An increase in the risk premium associated with a country drives up its interest rate. Because the higher interest rate reduces investment, the IS* curve shifts to the left. Because it also reduces money demand, the LM* curve shifts to the right. Income rises, and the exchange rate depreciates.

There are three reasons why, in practice, such a boom in income does not occur. First, the central bank might want to avoid the large depreciation of the domestic currency and, therefore, may respond by decreasing the money supply M. Second, the depreciation of the domestic currency may suddenly increase the price of domestic goods, causing an increase in the overall price level P. Third, when some event increase the country risk premium q, residents of the country might respond to the same event by increasing their demand for money (for any given income and interest rate), because money is often the safest asset available. All three of these changes would tend to shift the LM* curve toward the left, which mitigates the fall in the exchange rate but also tends to depress income.

The Mundell-Fleming Model with a Changing Price Level Recall the two equations of the Mundell-Fleming model: IS*: Y=C(Y-T) + I(r*) + G + NX(e) e LM* LM*' LM*: M/P=L (r*,Y) When the price level falls the LM* curve shifts to the right. The equilibrium level of income rises. The second graph displays the negative relationship between P and Y, which is summarized by the aggregate demand curve. IS* Income, Output,Y P AD Income, Output,Y

Key Concepts of Ch. 12 Mundell-Fleming Model Floating exchange rates Fixed exchange rates Devaluation Revaluation