According to both Schweser notes and Secret Sauce: Expansionary monetary policy = currency depreciation, current account DEFICIT, financial account deficit According to quicksheet: Expansionary monetary policy = currency depcreciation, current account SURPLUS, financial account deficit
yes, its a typo on their end. should be deficit, deficit.
why is that not on their errata? what are they so busying doing these days
the show NY Wrote: ------------------------------------------------------- > why is that not on their errata? what are they so > busying doing these days printing 2010 books with the same errors.
<3 schweser
Did anyone else notice they shrunk the Secret Sauce, got rid of the do-it-yourself-LOS-cards and still charged the same amount?
are u sure ?!!
My intuition is that the quicksheet statement is right since if currency depreciate. Your goods are cheap so they will export more en the FC is relatively expensive so you buy less, less import this makes the current account eXport-Import a surplus.
sherbeer Wrote: ------------------------------------------------------- > My intuition is that the quicksheet statement is > right since if currency depreciate. Your goods are > cheap so they will export more en the FC is > relatively expensive so you buy less, less import > this makes the current account eXport-Import a > surplus. this makes sense …
Hey, It should be: Expansionary monetary policy = currency depreciation, current account DEFICIT, financial account SURPLUS right? Thanks, M.
OH my GOD. that is is very distracting !!!
guys i think its do to with long run vs short run. in the short run, you will get a current account deficit, but in the long run you will get a surplus.
I think that it s the opposite, in the short run there willbe a current account surplus that will be more than offset on the long run resulting on a deficit, the opposite occurs for the Financial account, still talking about an expansionary monetary policy… Please correct me if I am wrong. M.
I noticed this exact error last night. For both expansionary fiscal and monetary policy, effects of the current account are the same, but different for capital account (deficit in monetary and surplus in fiscal – all to do with the real rate).
I always thought of it like the J-curve effect: in the short-run, the growth in the money supply will bring consumers more money, so they will import more. Hence, current account deficit. Over the long-term, the depreciation in domestic currency would lead to more exports, causing a surplus. Can someone who is 100% certain please post the correct intuition behind the long vs. short-run effects?
j curve is opposite effect. those 4 charts in the PM section are whats throwing everyone off. theyre horribly introduced. but as far as the econ, i am sticking with expansionary monetary policy is currency depreciate, current acount deficit, capital account deficit and for expanionary fiscal its mixed (but currency appreciate tends to dominate), current accoutn deficit, financial account surplus. schweser notes say this, they explain reasoning behind it, and they say nothing about short or long run
unanticipated Expa. Monetary Policy - pump money into economy, so Real Rate reduces -> Currency depreciates. when currency depreciates - your goods are cheaper, exports increase, imports decrease - so Current Account Surplus, Capital Account Deficit. and this is what is on the quicksheet.
@ the show NY. I stick to that too. it’s true I got confused by the last four models in PM section. that’s the last thing I read and still remember.
CP, thank you I was about to have to say the same thing! We have had this discussion like 50 times now.
cpk-- not according to schweser book 2 page 86 or sauce page 48