ch11the balance of payments(国际经济学浙江林学院,岑丽娟)

1、International EconomicsBy Robert J. Carbaugh8th EditionChapter 11:The Balance of PaymentsThe Balance of PaymentsBalance of PaymentsA record of international transactions between residents of one country and the rest of the worldInternational transactions include exchanges of goods, services or asset

2、s“Residents” means businesses, individuals and government agencies, including citizens temporarily living abroad but excluding local subsidiaries of foreign corporations2The Balance of PaymentsDouble-entry accounting in the BOPAll transactions are either debit or credit transactionsCredit transactio

3、ns result in receipt of payment from abroadMerchandise exportsTransportation and travel receiptsIncome received from investments abroadGifts received from foreign residentsAid received from foreign governmentsLocal investments by overseas residents3The Balance of PaymentsDouble-entry accounting (con

4、td)Debit transactions lead to payments to foreignersMerchandise importsTransportation and travel expendituresIncome paid on investments of foreignersGifts to foreign residentsAid given by home governmentOverseas investments by home country residentsEach credit transaction has a balancing debit trans

5、action, and vice versa, so the overall balance of payments is always in balance4Structure of the Balance of PaymentsCurrent accountGoods and services balanceMerchandise trade balanceServices balanceInvestment income (net)Unilateral transfersPrivate transfer paymentsGovernmental transfers5Structure o

6、f the Balance of PaymentsCapital accountAll purchases or sales of assets, including:Direct investmentSecurities (debt)Bank claims and liabilitiesOfficial settlements transactions6Current accountCurrent account surplus and deficitCurrent account and capital account balance each other; when one is in

7、surplus the other must be in deficitCurrent account surplus means exports of goods and services, investment income and transfers exceed imports and outflowsCurrent account deficit means imports of goods and services, and outflows are greater than exports and inflows; must be financed by borrowing (c

8、apital account inflows)7US Balance of Payments, 1999 ($ bill.)Balance of PaymentsCurrent accountMerchandise tradeexports$683.0imports-1,030.1Net-347.1ServicesTravel & transport recpts.5.3other services, net74.3All services, net79.6Balance on goods & services-267.5Contd.8US Balance of Payments, 1999

9、($ bill.)Balance of PaymentsCurrent account (contd)Income receipts & paymentsinvestment income, net-19.1employee compensation-5.7All income, net-24.8Unilateral transfers, net-46.6Balance on current account$-338.99US Balance of Payments, 1999 ($ bill.)Balance of PaymentsCapital accountChanges in US a

10、ssets abroad, netUS official reserve assets$8.7other US govt assets-0.4US private assets-381.0All changes, net-327.7Changes in foreign assets in the US, netforeign official assets44.6foreign private assets706.2All changes, net750.8Allocation of SDRs0Statistical discrepancy-39.2Balance on capital acc

11、ount$338.910US Balance of Payments 1970-99Balance of Payments11Balance of PaymentsCurrent account deficit a problem?Current account deficit has little to do with foreign trade practices or competitivenessDetermined mostly by domestic macro-economic conditions that cause demand to exceed supply and i

12、ncrease imports (paid for with borrowing)Whether a current account deficit is good or bad depends on whether the borrowed funds are used to pay for consumption or investment12Balance of PaymentsBalance of international indebtednessSummarizes one nations overall quantity of assets and liabilities against the rest of th