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xCFA 2 2017 > Economics > Flashcards

Flashcards in Economics Deck (7)
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1

♦ECON♦ Currency Exchange Rates

*VISAO DO AMERICANO*

Covered = fwd BRL / USD = (1 + 7%) / (1 + 2%) * Spot

Uncovered = Rbrl - Rusd

PPP = ∆Spot = Eπbrl - Eπusd

Int. Fischer Relation = Rbrl - Rusd = Eπbrl - Eπusd

2

♦ECON♦ Cobb-Douglas (GDP)

GDP Total Y = T * K α * L ( 1 - α)

GDP per worker Y / L = T * (K / L) α

3

♦ECON♦ Potential GDP growth rate

ΔY/Y = ΔT/T + α * ΔK/K + (1 - α) * ΔL/L

4

♦ECON♦ α (share of K in Y)

α = r * K/Y

5

♦ECON♦ Growth Theories (Classical, Neoclassical and Endogenous) + Convergence (Absolute, Conditional and Club)

Classical Growth = If GDP / capita > subsistence level, than pop. will grow until is back at sub level Neoclassical = K growth is only temporary ---> g* = θ / (1 - α) and G* = θ / (1 - α) + ∆ L Endogenous = K have constant return (R&D) Absolute Convergence = Developed will develop Conditional = Based on certain conditions Club = And only if part of a club

6

♦ECON♦ Mundell-Fleming Model

Impact of monetary and fiscal policies in the fx rate

7

♦ECON♦ Stock price growth relation to GDP

Δ P = ΔGDP + Δ(E/GDP) + Δ(P/E)