企业使用一些进口投入然后折旧利润或单位产品价格每单参考.pdfVIP

Firmusessomeimportedinputs:thenERdepreciation→profits↑or↓?

Profitperunit=productprice(perunit)–costofproduction(perunit)

=Pg–aDPd–bMPm

Pg-Priceperunitofgood

aD-noofunitsofdomesticinputsrequiredtoproduceaunitofoutput

Pd-priceperunitofdomesticinput

bM–noofunitsofimportedinputrequiredtoproduceaunitofoutput

Pm-priceperunitofimportedinput(indomesticcurrency)

Assume:inputsusedinfixedproportions

[Consideracaselike:1shirtproducedusing3unitsofdomesticinput(e.g.3hoursof

domesticlabour)and4unitsofimportedinput(e.g.4metersofimportedcloth)]

Therearedifferentwaysofexpressingtheexchangerate.Hereweusethefollowing:

‘e’–unitsofdomesticcurrencyperunitofforeigncurrency[e↓→ERappreciation]

(notdepreciationasstatedinslide).

[Consideracaselikethechangefrom8Rmb=1US$to6Rmb=1US$]

LetPbethepriceinthe‘worldmarket’–thepricethathastobepaidtobringthegoodtothe

countryfromaforeigncountry-oftheimportedinput

Then,ifperfect(100%)ERpass-through,

Pm=eP[note,anothertypocorrected]

(a)Ifallgoodsaresoldindomesticmarket?

Consideranappreciationoftheexchangerate.Thatis,e↓

Workoutwhathappenstothecostofproductionandprofitability,notingthatthe

productpricedoesnotchangebecauseeverythingissoldinthedomesticmarketand

priceofdomesticinputsisalsonotaffected.

(b)Ifallgoodsareexported?

Noteherethattheproductpricereceivedbytheproducerindomesticcurrency–forthe

samepriceintheforeignmarketinforeigncurrency-goesdownbythesameproportion

asthechangeintheexchangerate(lower‘e’).Ifthe