Chapter 7: The Goods MArket in an Open Economy 7-1: The IS Relation in the open Economy 7-2: Equilibrium Output and the trade balance 7-3 Increases in demand, domestic or Foreign 97-4: Depreciation, the Trade Balance, and output 97-5: Looking at dynamics The J-curve 7-6: Saving, Investment, and Trade Deficits 2003-7-13
2003-7-13 1 Chapter 7:The Goods Market in an Open Economy 7-1: The IS Relation in the open Economy 7-2: Equilibrium Output and the Trade Balance 7-3: Increases in Demand, Domestic or Foreign 7-4: Depreciation, the Trade Balance,and output 7-5: Looking at Dynamics:The J-Curve 7-6: Saving, Investment, and Trade Deficits
7-1: The s relation in the open Economy The demand for domestic goods The determinants of the demand for Domestic Goods o The determinants of c, and G o The Determinants of Imports o The Determinants of Exports 2003-7-13
2003-7-13 2 7-1: The IS Relation in the open Economy The Demand for Domestic Goods The Determinants of the Demand for Domestic Goods ⚫ The Determinants of C, I, and G ⚫ The Determinants of Imports ⚫ The Determinants of Exports
The Demand for Domestic Goods e In an open economy, the demand for domestic goods is given by z三C+|+G-EQ+Ⅹ (7.1) 2003-7-13 3
2003-7-13 3 The Demand for Domestic Goods In an open economy, the demand for domestic goods is given by Z ≡ C+I+G-εQ+X (7.1)
The Determinants of Cy, and Domestic demand C+I+G=C(Y-1)+(Y, r)+G 十 2003-7-13
2003-7-13 4 The Determinants of C, I, and G Domestic demand: C+I+G=c(Y-T)+I(Y,r)+G ( + ) (+, -)
The determinants of Imports ●Q=Q(Y,E) (72) 十 2003-7-13 5
2003-7-13 5 The Determinants of Imports Q=Q(Y,ε) (7.2) (+,-)