International Energy Shock and Dynamics－A Comparison between Floating Exchange Rate Regime and Fixed Exchange Rate Regime

• Main Authors: Pei-Yi Wu, 吳珮儀
• Other Authors: Vey Wang
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/73377783726399139892

碩士 === 逢甲大學 === 經濟學所 === 98 === 　　The extensive use of energy has had a great influence on people’s life in the economy. With energy’s dissipating, we are compelled to have an encounter with continuously increasing on the international crude oil price which followed by the shortage of energy. It turned out to cause a country’s economic stagnation, commodity price rising, unemployment rate increasing and so on. On the other hand, due to the natural resources’ excessive exploration, the environment has been extremely destroyed. That’s why it is arouse the whole world’ highly attention and discussion. 　　The purpose of this paper is focused on constructing an open economy under distinct exchange rate regimes which include a commodity market, a money market and a foreign exchange market to discuss different effects on the commodity price, the nominal exchange rate or the foreign exchange reserves in the long-run equilibrium and dynamic adjustment progress in response to the international crude oil price shocks or adjust tariff for crude oil. 　　According to the result, it is shown under floating exchange rate regime if the economy confronts the international crude oil price shocks, the commodity price and the nominal exchange rate could increase or decrease in the long-run. It’s depends on the degree of capital mobility, exchange rate effect of demand for export, interest elasticity of demand for investment, supply elasticity, income elasticity of demand for money, interest semi-elasticity of demand for money, income elasticity of import and price effect of demand for crude oil. Likewise, the commodity price and the foreign exchange reserves would also have ambiguous changes in the long-run under fixed exchange rate regime. In addition, the government announces domestic crude oil price to increase after the international crude oil price rising and thus it will make both the commodity price and the nominal exchange rate show undershoot, overshoot or even misadjustment during the adjusting period under floating exchange rate regime. Generally, if the exchange rate effect of demand for export and the price effect of demand for crude oil are relatively large, plus income elasticity of import is relatively less, the commodity price will present misadjustment while the nominal exchange rate exhibits undershoot. However, the commodity price and the foreign exchange reserves only display undershoot and overshoot under fixed exchange rate regime.