Académique Documents
Professionnel Documents
Culture Documents
PART I. BALANCE-OF-PAYMENT
CATEGORIES
BALANCE-OF-PAYMENT CATEGORIES
2. Double-entry bookkeeping
BALANCE-OF-PAYMENT CATEGORIES
4. Current Account
records net flow of goods, services, and unilateral transfers.
BALANCE-OF-PAYMENT CATEGORIES
5. Capital Account
a. Function: records public and private investment and lending. b. Inflows = credits c. Outflows = debits
BALANCE-OF-PAYMENT CATEGORIES
2.) direct
3.) short term
BALANCE-OF-PAYMENT CATEGORIES
BALANCE-OF-PAYMENT CATEGORIES
BALANCE-OF-PAYMENT CATEGORIES
7. Net Effects:
a. Sum of all transactions must be zero:
BALANCE-OF-PAYMENT CATEGORIES
8. The Balance-of-payment measures
a. Some Definitions:
1.) Basic Balance
BALANCE-OF-PAYMENT CATEGORIES
BALANCE-OF-PAYMENT CATEGORIES
BALANCE-OF-PAYMENT CATEGORIES
2.) Net Liquidity Balance:
measures the change in private domestic borrowing or lending require to keep payments equal without adjusting official reserves.
BALANCE-OF-PAYMENT CATEGORIES
NS = C + I
(5.2)
(5.3)
e.
2.)
PART III. COPING WITH THE CURRENT ACCOUNT DEFICIT I. POSSIBLE SOLUTIONS UNLIKELY TO WORK:
A. Currency Depreciation
B.
Protectionism
THE J - CURVE
Net change in trade balance
0 Trade balance improves
Currency depreciation
TIME
B.