Interest-Rate Differentials Country risk&ex -rate- expectations Country risk Political upheaval default on loan repayments higher i-rate to compensate Ex-rate expectations expect RMB to appreciate loans in RMB can pay a lower i-rate
Goal Develop the Solow Growth Model How much of the economy's output should be consumed today and how much should be saved for the future? Static analysis(Ch. 3)> Dynamic
Chapter 1 Introduction 1.1 What is econometrics? Application of st atistical and mathematical met hods to the analysis of economic Purposes 1. Testing economic theories 2. Policy analysis(simultaneous equations model, vector autoregressive model
5. 1 The Government Bond Market 5.1.1 when the government runs a deficit, it has to get the funds. There are three ways for the government to get funds