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009 Homework3 Format
009 Homework3 Format
009 Homework3 Format
Table of Contents
Exports and imports................................................................................................................................... 1
Can imports or exports exceed GDP?................................................................................................... 2
Nominal exchange rate.............................................................................................................................. 2
Real exchange rate....................................................................................................................................... 2
Uncovered interes parity relation......................................................................................................... 4
Exercise 8........................................................................................................................................................ 4
2. Make a plot of GDP (constant LCU) (Y^ t in the model expressed in real terms),
Exports of goods and services (constant LCU) ( ^X t in the model expressed in real
terms) Imports of goods and services (constant LCU) ( ^ ℑt∗ε t in the model expressed
in real terms) and net exports ( ^
NX t in the model expressed in real terms).
GDP, imports , exports, net exports (constant
1000000000000000
800000000000000
600000000000000
400000000000000
LCU)
200000000000000
0
1960 1970 1980 1990 2000 2010 2020 2030
-200000000000000
-400000000000000
Añ o
^
Xt
3. Calculate the exports as a percentage of GDP, ∗100 , the imports as a
Y^ t
^ t∗ε t
ℑ
percentage of GDP, ∗100 and net exports as a percentage of GDP,
Y^ t
^
N Xt ^
X t −ℑ^ t∗ε t
∗100≡ ∗100 .
Y^ t Y^ t
^
Xt
4. Make a plot of exports as a percentage of GDP, ∗100 , the imports as a
Y^ t
^ t∗ε t
ℑ
percentage of GDP, ∗100 and net exports as a percentage of GDP,
Y^ t
^
N Xt X ^ ∗ε
^ t −ℑ t t
∗100≡ ∗100 where the x-axis corresponds to the date and y-axis
^
Yt ^
Yt
corresponds to the values of these variables. Can imports or exports exceed GDP?
40.00%
30.00%
10.00%
0.00%
1960 1970 1980 1990 2000 2010 2020 2030
-10.00%
-20.00%
-30.00%
Añ o
5. Point out if it is possible that imports or exports can be greater than GDP. Then
explain why or why not imports can be greater than GDP supporting your answer
with an example or using elements from macroeconomic theory.
2500
2000
1500
1000
500
0
7/12/1991 2/11/1995 28/9/1999 24/8/2003 20/7/2007 15/6/2011 11/5/2015 6/4/2019
Fecha
1
The data of the table was taken from https://github.com/TheEconomist/big-mac-
data
2014-01-01 8600 4.624167
2014-07-01 8600 4.795000
2015-01-01 7900 4.790000
2015-07-01 7900 4.790000
2016-01-01 7900 4.930000
2016-07-01 8900 5.040000
2017-01-01 9900 5.060000
2017-07-01 9900 5.300000
2018-01-01 10900 5.280000
2018-07-01 11900 5.510000
2019-01-01 11900 5.580000
2019-07-09 11900 5.740000
2020-01-14 11900 5.670000
2020-07-01 11900 5.710000
2021-01-01 12950 5.660000
8. Make a plot of the real exchange rate using the information you found in point 7
where the x-axis corresponds to the dates of the table above and y-axis
corresponds to the value of the real exchange rate.
Exercise 8
This exercises is taken from:
Oliver Blanchard (2017) Macroeconomics (7 Edition) > Chapter 18 The Goods
Market in an Open Economy > Questions and Problems > Exercise 8
• Consider an open economy in which the real exchange rate is fixed and equal to
one. Consumption, investment, government spending, and taxes are given by:
^ =10+ 0.8( Y^ −T^ )
C t t t
^I =10
t
^ t =10
G
T^ t=10
11. Solve for equilibrium output, Y^ t and point out the multiplier for the domestic
economy.
1
multiplicador= =5
1−0,8
12. Assume that the foreign economy is characterized by the same equations as the
domestic economy (with asterisks reversed). Solve for the equilibrium output of
each economy and point out the multiplier for the domestic and the foreign
economy.
^ ¿=10+ 0.8( Y^ ¿ −T^ ¿ )
C t t t
^I ¿=10
t
^ ¿t =10
G
T^ t =10
¿
^
ℑt =0.3 Y^ t
¿ ¿
^
X ¿t =0.3 Y^ t