Int Econ-Ch010-S2012-V2 International Economics 国际经济学课件.pptxVIP

Trivia Question Over the last few years, we can definitely say that China’s Balance of Payment (BoP) has been: A) Negative B) Positive C) Zero D) Sometimes positive, sometimes negative E) None of the above 1 Chapter 10 The Balance-of-Payments (BOP) 3 Fundamental Issues What’s (in) the Balance-of-Payments Accounts? What are Surpluses and Deficits? What’s the Connection between the Balance-of-Payments (BOP) and the VALUE of a Nation’s Currency? 4 Introduction Countries vary in their degree of openness, or the extent to which their real economic activities are integrated with the rest of global economies. Merchandise Trade: Exports and Imports of Physical Goods. Services Trade: Exports and Imports of Services: Banking, insurance, travel, transportation, consulting, and other services on which the item traded is not a physical good. 5 Introduction Balance-of-Payments (BOP) account: Summarizes all the transactions by individuals, firms, and governments of a country with their counterparts in the rest of the world. 6 What’s in the Balance-of-Payments Accounts? Transactions recorded in a nations BOP can be divided into categories: Autonomous or Independently Motivated Transactions Accommodating or Compensatory Transactions 7 What’s in the Balance-of-Payments Accounts? Autonomous or Independently Motivated Transactions: Transactions that individuals, firms, or government agencies undertake for their own purposes: Utility Maximization (Individuals); Asset Portfolio Decisions, Profit Maximization(firms); Foreign-policy goals (Government) Example; Chinese (Resident in Beijing) buying pair of Italian shoes; a U.S. firms selling bonds to a German resident; Chinese government sending foreign aid to Africa. These goals are often times unrelated to the balance of payments; hence the name “Autonomous or Independently Motivated Transactions”. 8 What’s in the Balance-of-Payments Accounts? Autonomous or Independently Motivated Transactions: 2. Accommodating, or Comp