ch01 Keeping Up with a Changing World 国际货币与金融经济学英文版课件

1、Chapter 1Keeping Up with a Changing WorldTrade Flows, Capital Flows, and the Balance of PaymentsINTERNATIONAL MONETARY AND FINANCIAL ECONOMICSThird EditionJoseph P. DanielsDavid D. VanHooseCopyright South-Western, a division of Thomson Learning. All rights reserved.1International Economic Integratio

2、nInternational economic integration refers to the extent and strength of real-sector and financial-sector linkages among national economies.Real Sector: The sector of the economy engaged in the production and sale of goods and services.Financial Sector: The sector of the economy where individuals tr

3、ade in financial assets.Though economists tend to measure activity in these two sectors separately, an important point of this chapter is to show that they are linked.2Importance of the Global Market for Goods and ServicesOver the last 35 years, the volume of world trade in goods and services has gr

4、own by almost 6 percent annually. The cumulative effect of this growth is more than a five-fold increase in world trade.As measured by the share of overall real-sector activity, world trade in goods and services has become more important to advanced and developing economies alike.3Growth of World Ex

5、portsSOURCE: International Monetary Fund, Economic Outlook, and authors estimates.During the past thirty years, world trade in goods and services has exhibited positive growth rates for all but two years.4Selected Nations TradeThe global market for goods and services has become more important for in

6、dividual nations. The percentage shown reflects each nations trade as a share of its overall economic activity.SOURCE: International Monetary Fund, International Financial Statistics, various issues, and authors estimates.5Growth of Trade and Foreign Exchange Transactions6Cross-Border Transaction in

7、 Bonds and EquitiesIn Germany, the United States, and the United Kingdom, international transactions in bonds and equities have grown by more than 3,000 percent, 1000 percent, and 700 percent respectively.SOURCE: Bank for International Settlements, International Financial Statistics, and authors est

8、imates.7Top Twenty Globalized NationsIrelandSwitzerlandSingaporeNetherlandsSwedenFinlandCanadaDenmarkAustriaUnited KingdomNorwayUnited StatesFranceGermanyPortugalCzech RepublicSpainIsraelNew ZealandMalaysiaSource: Foreign Policy8The Top Global CompaniesRanked by Foreign Assets RankCompanyHome Countr

9、yIndustry1VodaphoneUnited KingdomTelecommunication2General ElectricUnited StatesElectrical3ExxonMobileUnited StatesPetroleum4Vivendi UniversalFranceDiversified5General MotorsUnited StatesMotor Vehicles6Royal Dutch/ShellUnited Kingdom / NetherlandsPetroleum7BPUnited KingdomPetroleum8Toyota MotorJapan

10、Motor Vehicles9TelefnicaSpainTelecommunications10FiatItalyMotor Vehicles9TransnationalityAre the activities of the worlds largest firms really spread out globally?A transnationality index measures this.It is calculated by averaging the ratios of Foreign assets to total assetsForeign sales to total s

11、alesForeign employees to total empolyees.10An ExampleGeneral Electric, a U.S. TNC, ranks second on the list of the worlds largest non-financial TCS based on foreign assets.Foreign assets are 159,188, total assets 437,006, foreign sales 49,528, total sales 129,853, foreign employment 145,000 and tota

12、l employment 313,000.Its TNI is only 40.3 and it does not appear on the list of the top ten TNCs by TNI. 11Calculation12The Top Global CompaniesBased on TransnationalityRankingCompanyHome CountryIndustry1Rio TintoU.K. / AustraliaMining2ThomsonCanadaMedia3ABBSwitzerlandMachinery and Equipment4NestlSw

13、itzerlandFood and Beverages5British American TobaccoUnited KingdomTobacco6ElectroluxSwedenElectronic Equipment7InterbrewBelgiumFood and Beverage8Anglo AmericanUnited KingdomMining9AstrazenecaUnited KingdomPharmaceuticals10Phillips ElectronicsNetherlandsElectronic Equipment13Balance of Payments Accou

14、ntingTo understand how economists measure international transactions in the real and financial sectors of an economy, and how these sectors are linked, we turn to the balance of payments (BOP) accounting system.A system of accounts which is a subset of the National Income and Production Accounts.A d

15、ouble-entry system.Debit Entries: Transactions that generate a payment outflow (e.g., import).Credit Entries: Transactions that generate a payment inflow (e.g., export).14Balance of PaymentsThe current account is the broadest measure of a nations real sector trade.Includes:GoodsServicesIncome Receip

16、ts and PaymentsUnilateral Transfers15Current AccountGoods: Exports and imports of tangible items.Services: Exports and imports of services, for example:Typical business services such as banking and financial services, insurance, and consulting.Tourism16Current AccountIncome Receipts: Includes items

17、such asInvestment income on US-owned assets abroad.Receipts of income on US direct investment abroad.Government income receiptsIncome Payments: Includes items such asInvestment income on foreign-owned assets in the United States.Payments of income on foreign direct investment in the United StatesUS

18、Government income payments17Current AccountUnilateral Transfers: Includes items such as:Government grants abroadPrivate remittancesPrivate grants abroadThe current account balance is the sum of the debit and credit entries in the accounts just described.A current account deficit occurs when the sum

19、of the debit entries exceeds the sum of the credit entries. A current account surplus occurs when the sum of the credit entries exceeds the sum of the debit entries.18US Current Account (2003)19Balance of PaymentsThe Financial SectorThe Capital and Financial Account tabulates the flows of financial

20、assets between domestic residents and foreign residents and governments.The private capital account tabulates flows among private domestic residents and foreign private residents. 20The Capital AccountThe Capital and financial Account:Records international transactions in the financial sector.Includ

21、es portfolio and foreign direct investment.Includes changes in banks and brokers cash deposits that arise from international transactions.The main accounts are:US-Owned Assets Abroad: Increase or decrease in US ownership of foreign financial assets.Foreign-Owned Assets in the US: Increase or decreas

22、e in foreign ownership of domestic assets.Reserve Assets: Primarily the assets of central banks.21Portfolio and Foreign Direct InvestmentPortfolio Investment: Individual or business purchase of stocks, bond, or other financial assets or deposits. (An income strategy)Foreign Direct Investment (FDI):

23、Purchase of financial assets that results in a 10 percent or greater ownership share. (A financial control strategy)22Capital and Financial Account23The Balance of PaymentsThe Statistical DiscrepancyThe sum of the debit and credit entries in all of the BOP should total zero.Of course there are error

24、s and omissions resulting in a non-zero balance. An offsetting entry to this non-zero balance is made in the statistical discrepancy account.In this way, the total of the debit and credit entries equals zero.24BOP ExamplesU.S. company imports an automobile valued at $50,000GoodsServicesIncomePayment

25、s and ReceiptsUTCapitalDebits(imports)-50,000Credits(exports)50,00025BOP Examples U.S. government sends $1 million in humanitarian supplies to AfghanistanGoodsServicesIncome Payments and ReceiptsUTCapital Debits(imports)-1 millionCredits(exports)1 million26BOP Examples U.S. resident buys a UK Tbill

26、equivalent in value to $1,000GoodsServicesIncome Payments and ReceiptsUTCapital Debits(imports)-1,000Credits(exports)1,00027BOP Examples U.S. resident receives $100 in interest on a foreign asset they ownGoodsServicesIncome Payments and ReceiptsUTCapital Debits(imports)-100Credits(exports)10028BOP E

27、xamples A Marquette University student goes to Mexico on break and spends $500GoodsServicesIncome Payments and ReceiptsUTCapital Debits(imports)-500Credits(exports)50029BOP Examples TotalGoodsServicesIncome Payments and ReceiptsUTCapitalDebits(imports)-50,000-500-1 mil-1,000-100Credits(exports)1 mil

28、l1001,00050,000500Current Account-50,400Capital Account50,40030Net Creditor and Net Debtor StatusA net creditor is a nation whose total claims on foreign residents exceed the total claims of foreign residents on the residents of the domestic nation.A net debtor is a nation whose total claims on fore

29、ign residents are less than the total claims of foreign residents on the residents of the domestic nation.It is not necessarily good nor bad to be either a net debtor or net creditor.31The United States as a Net DebtorThe United States has been a net debtor at various times in its history. The Unite

30、d States was a net debtor in the late 1800s.SOURCE: Data from Economic Review of the federal Reserve Bank of Kansas City.32The Relationship Between the Current Account and the Capital AccountExpenditures Approach to National IncomeNational income is the sum of expenditures in the following categorie

31、s; consumer expenditures, private investment expenditures, government expenditures, and net export expenditures,y= c + ip + g + (x-m) Let the current account, ca equalca = (x m)Theny=c + ip + g + ca33The Relationship Between the Current Account and the Capital AccountIncome Approach Income has three

32、 possible uses; it can be spent on current consumption, it can be saved (private saving), and we pay taxes to the governmenty= c + sp + tBecause both approaches equal national income, we can set the two identities equal:c + sp + t = c +ip + g + caor, sp ip (g - t) = ca34The Relationship Between the Current Account and the Capital AccountPrivate SavingPrivate saving can be used to purchase three types of assets, domestic private investment, government debt (g t) or to accumulate for