Balance of Payments(国际金融-香港大学,WONG Ka Fu)2.0汇总.pptVIP

Nonzero Balance of Payments Having a balance of payments surplus means a country is increasing its official reserve assets a balance of payments deficit is a reduction in official reserve assets The Relationship Between CA and KA CA + KA = 0 by accounting because every transaction involves offsetting effects In practice, measurement problems, recorded as a statistical discrepancy, prevent CA + KA = 0 from holding exactly. Net Foreign Assets and the BOP Accounts Net foreign assets are a countrys foreign assets minus its foreign liabilities The net increase in foreign assets equals a countrys CA surplus A CA surplus implies a KA deficit, and thus a net increase in holdings of foreign assets (a capital outflow), and vice versa. A Countrys International Trade and Lending can be equivalently measured as CA surplus KA deficit net acquisition of foreign assets net foreign lending (if NFP and net unilateral transfers are zero) net exports Why do we care about BOP? CA 0 implies export import demand for home currency KA 0 implies capital inflow capital outflow demand for home currency S D Apple $/apple Excess demand for apple will drive up the price of apple, i.e., $/apple. Excess demand S D HKD JPY/HKD Excess demand for HKD will drive up the price of HKD, i.e., JPY/HKD. Excess demand * * Balance of Payments WONG Ka Fu 19th January 2000 International Transactions Goods services Payment A B Saving and Investment in the Open Economy A countrys spending need not equal its production in every period due to foreign trade The fundamental determinants of a countrys trade position are its saving and investment decisions Home economy = domestic economy Balance of Payments (BOP) Accounts The record of a countrys international transactions Any transaction that involves a flow of money into home economy is a credit (+) item (enters with a plus sign); for example, exports Any transaction that involves a flow of money out of home economy is a debit (-) item (enters with a min