nym जएयत्म्री क्यों स्वो consortium स्अँस अपवाग उन्न देती same off economic shocks in a small open economy. जठवूँब आचा में आजा मब लगे, कि खो मैं इक्नाम्री चागणका है के सुप्स से Gerilimोंनेक स्ईपाप्etter off the economic shocks in a small open economy. at a given word interest rate will increase net foreign lending okay let's see suppose we have this investment desired curve saving curve okay and suppose this is the word interest rate rw okay so this difference actually this is important this is the net foreign lending okay economy may at this word interest rate investment is this much and saving is this much so this difference is net foreign lending so today we will talk about this that what will be the effect of any economic shock on this net foreign lending obviously there will be two possibilities of shock what can be the shock so that shock can be the which is saving curve up to the right shift so say difference increase or investment curve to the left shift so that will increase this difference saving curve how the right word shift can be we know that if current income increases wire wire rise then your current saving will increase second we have also studied that if expected future income falls then this will also make people currently save more because their future income is expected that the future is not good that their income will be less then we want to save more for the future and similarly if at any given income on the government decides that he has to spend more than that also national saving the government if it spends less then the national saving will increase and vice versa so these are the possibilities from which the saving curve is up to the right shift and investment curve towards lift left shift so this difference will increase its left shift what can be the causes that the product of the future of capital which is expected if it is less then we have seen in the chapter of investment that investment then it will be less then it will shift to the left if the government increases the taxes then these are the possibilities in which the difference between desired saving and desired investment difference when increase it can be without these conditions and then it will change your net foreign landing ok so we discuss a case in which there is a temporary adverse supply shock so temporary adverse supply shock that your income temporarily will be less ok when income will be less then your saving will be less and net foreign landing will also be less we for example temporarily for some year the sale has come or some other such conditions will be taken then the income will be less that year and the saving will also be affected by it why the investment will not be affected because we assume that this shock is temporary it has no permanent effect when investment is there then we have seen that it depends on the product of the future ok so from this diagram we understand that how temporary adverse supply shock will work initially this is the investment curve i1 s1 is the initial saving curve ok rw international interest rate to is per from o to a this is the desired saving at this international interest rate and from o to b this is the desired desired saving o is the desired investment and o b is the desired saving so the difference between saving or investment that is a b ok this difference is your net foreign landing we have talked about this again and again that this current account surplus also we will call this under certain assumptions which have net factor payment zero and which have your unilateral transfers that net zero under that assumption this will be your net exports or current account your surplus will also be and this net foreign landing will also be so anyhow in this situation a b is the net foreign landing now this temporary adverse supply shock because of the income will be less so the saving curve shift to the left from s1 to s2 word interest rate we have talked about that this economy is a small economy ok any activity in this can not affect the world interest rate its share is so small that it can not affect the market interest rate so word interest rate is same rw saving come over here that is the impact that the difference that desired saving or investment may go a b see come over here you have a d right so net foreign landing up key skin tijam come over here adverse supply shock in tijam second we take a case in which the effect of economic shock in a small open economy this way we assume the rank there is an increase in the expected future margin product of capital margin product of capital future key how increase or expected suppose there is a positive improvement in the technology innovation of skin tijam a yet axis key look expect career make a change a favorable risk in tijam a up key investment desired investment to a more ice car jay g or skin tijam a desired foreign landing jay have come over jay g kase so way i1 is the initial investment curve s1 is the initial saving curve so the difference rw is the market international market interest rate so a b is the difference at rw a b is initially the foreign landing okay so this key bhajay se jham na assume kya kya innovation ho ghi aur is sara ki koi aur cheese key bhajay se expected future margin product increase karne se investment curve up to the right move kar gaya i1 ki bhajay ab aq kya pahas investment curve i2 aur ab international interest rate par ab ye difference desired saving or investment ka kya raya gaya okay pehle ab tha aur ab us se ye kaam ho kar ye wala fb ye difference raya gaya so is kya in tijam a bhi aapki foreign landing kaam ho ghi to is me ham ne aaj samjya kis maal open economy me kis tara se koi economic shock jo hai wapke goods market ko effect kerega aur kis tara se net foreign landing ye boring ko effect kerega thank you very much