收藏家 J‘s Collection

Rule of 70, approximate years to double = 70/growth rate

Factors of production：
Land, Capital Goods,  Labor, Entrepreneurial ability

Preconditions of economic growth:
Markets, Property rights, Monetory exchange 

Labor productivity growth / Real GDP per labor hour有2个因素决定，

1.growth in physical capital per labor hour, 导致move along productivity curve，technology level一定的情况下，有One-Third Rule，1%改变1/3%的real GDP per labor hour，剩下的是technological change导致的改变。
2.technological change  ，导致productivity curve to shift 

有law of diminishing returns

Key method to increase eco growth:
encouraging savings
encouraging R&D to develop tech advances that are public goods
stimulate international trade to realize gains from specification
improve the quality of education by investing in human capital 

Key factors driving eco growth:
Saving and investment in new capital
Investment in human capital 
Discovery new tech

3个Growth Theories

1.Classical growth theory,说real GDP是temporary (real GDP/person up above subsisitence level)-> population explodes -> Real GDP/person down to subsistence level.

2.Neoclassical growth theory, 说no tech change -> no real GDP growth, Tech Change -> increased saving and investment -> capital per labor hour grow and real return fall.
when real return = target return, economic growth stops.
Tech drives eco growth, but not influenced by eco growth.
population growth independent  of economic growth.(difference between 1&2) 

3.New growth theory,说Eco growth continues indefinitely as tech advances. Real rate down -> incentive to discover new products and methods -> real return grow and > target return.
Eco growth does influence tech development(difference between 2&3) 
low profits is incentive to innovate(key difference btw 2&3)
knowledge capital 不管low of diminishing returns.
也叫perpetual motion economy,  endogenous growth model

Economic Regulation: 包括控制natural monopolies 和competitive industries, 为了控制price，有2种，Cost-of-service & Rate-of-return， 控制excessive monopoly profit 和 predatory competitive practices

Social Regulation: 包括控制across all industries

nagative effects: creative response (feedback effect)

Regulator Behavior:
Capture Hypothesis, 说regulator会收industry影响。
Share-the-gains, Share-the-pains theory, 说 regulator会考虑三方的利益，legislators，custormers，regulated firm

Barriers to trade:
Tariff, benefit domestic producers, worker in protected industries and gov. at the expense of domestic consumers and workers outside the protected industry.
Quotas, benefit domestic producers, worker in protected industries, and those with import licenses , at the expense of domestic consumers and worker outside the protected industry.
Voluntary export restrains(VERs), benefit domestic producers, workers in protected industries, and those with export licenses or the power to grant them, at the expense of domestic consumers and workers outside the protected industry.
supports:
1. protect developing industries
2.anti-dumping
3.national defense

little supports:
1. protect jobs.
2.create jobs.
3.depress high wage

Real FX = Nomi Fx × Price in Foreign / Price in Domestic

Currency Demand:
1.demand for export from the country(or area) 
2.interest rate of the currency
3.expected future exchange rate

Currency Supply:
1.demand for import
2.interest rate  of other currencies
3.expected future exchange rate

Same factors impact on supply&demand, so exchange rate may be quite volatile(more so if supply&demand independent.)  

Balance of payment equation(BOP)

current account + capital account + official settlement account = 0
current account: net exchange of goods and services, investment income, unilateral transfers(gifts to or from other nations)
capital account(financial): flow of funds, to make up the difference for current account.
official settlement account: changes in official reserves(foreign currency, gold, IMF special drawing rights(SDRs), other foreign assets)

Flexible ex rate,决定于supply&demand without direct intervention by central bank

Fixed rate, peg the value of a currency, set by gov, need active gov intervention,需要一定的level的 reserves

Crawling Peg ex rate, set a target range for a limited period of time, reduce the risk to run out of reserves

Direct Quotes: DC/FC(base currency/counter currency),  Indirect, FC/DC
AUD:USD=0.6 –> USD/AUD= 0.6 –> 0.6-USD/AUD用于计算cross rate 
 

fx market: spot market , forward market, currency swap market 

bid-ask spread = (ask-bid)/bid , depend on market conditions, bank and currency dealer positions,  trading volume

Triangular Arbitrage

base currency forward discount=forward rate – spot rate = negative number
base currency forward premium=forward rate – spot rate = positive number 

Annualized forward premium/discount =（Fr-Sr）/Sr×（360/number of forward contract days）

 

Interest rate parity, coverd interest arbitrage
forward=spot × （1+rf(n/360)） /(1+rd(n/360))

 

Unanticipated shift to expansionary monetary policy -> economic growth, accelerated inflation rate, lower real interest rate

Unanticipated shift to expansive fiscal policy -> budget deficits, increase in aggregate demand, accelerated inflation rate, increase in domestic real interest rates

Purchasing power parity(PPP)
relative PPP: E(St)=S0 × [（1+ If）/（1+Id）]^t

International Fisher Relation: interest rate diff. should be equal to expected inflation diff. real interest rates are stable.
exact methodology: (1+r ) =(1+real r)(1+E(I))
linear approximation: r≈real r + E(I) / real r≈ r- E(I)

Uncovered interest rate parity combined PPP 和Fish relation
forward=spot × （1+rf(n/360)） /(1+rd(n/360)) = E[Sn] 
(F-S0)/S0 =E(%ΔS)

GDP+net property income from abroad=GNI-depreciation=NNI

GDP常用，但有问题，1. survey得来的数据耗时且不准，2.低估了灰色和地下经济

GDP三部分：perfect world，output=expenditure=income
output：net value added=total production – total cost  (most reliable)
expenditure：Total final expenditure(TFE)=all consumption+investment+export goods and services
income：all earnings ,trading profits ,rental income (least reliable)

Expenditure 是market price（含tax和subsidy），Output和Income是factor price
GDP at market price – indirect taxes + subsidies = GDP at factor price 

Output是current 和 constant prices
Expenditure是current price， adjusted to constant price，算price index，叫GDP deflator （volatile eco时不准）
Income用current price，用price index转换成constant price