修订开放宏观经济学econg25t复习题.pdfVIP

OPEN ECONOMY MACROECONOMICS (ECON G25T) REVISION QUESTIONS 1. What is the law of one price (LOOP)? Under what assumptions will it hold? Discuss the role of goods arbitrage in ensuring that the LOOP holds. 2. Suppose goods arbitrage is not possible. Are there any other mechanisms that might limit divergences from the LOOP? 3. What is absolute purchasing power parity? How is it related to the LOOP? 4. Is imperfect competition necessary to ex in deviations from purchasing power parity? 5. Does the real exchange rate follow a random walk? Assess the relevant evidence. 6. What i change-rate pass-through? How c ow degree of exchange-rate pass- through be ex ined? 7. Why do prices differ between cities? What effect does an international border have on these differences? Discuss relevant empirical studies. 8. How is it possible to hedge the risk of exchange rate fluctuations? Distinguish between the case where there is a forward market in the relevant currencies and the case where there is no su arket. What is the importance of transactions costs? 9. What is the covered interest parity condition and under what assumptions will it hold? How do transactions costs affect the condition? 10. Under what conditions will domestic and foreign interest rates be equal? 11. Is there insufficient international portfolio diversification? If so, how can this be ex ined? 12. What is the Marshall-Lerner condition? Why is it usually assumed to hold in the ysis of the Mundell-Fleming model? 13. Discuss the effects of m ary and fiscal policies under flexible exchange rates in the (small-countr