Study the international Finance at the macro level. In this slide we will see the Current Account situation of several countries and Vietnam on focus (as of 2008).
In slide 2.2 we will see how to Finance the Current Account deficit.
15. The current account of the balance of payments Export of goods f.o.b. - Imports of goods f.o.b. = Trade balance + Exports of non-financial services - Imports of non-financial services + Investment income (credit) - Investment expenditures (debit) + (-) Private unrequited transfers + (-) Official unrequited transfers = Current account balance From less liquid items toward more liquid items!
38. Thailand in the Globalization Large trade openness of Thailand leads to spectacular current account and growth adjustment after 1998 crisis Σ XGS/PIB > 120% GDP Current account
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43. Time lags, elasticities and the adjustment mechanism: “J curve” Trade Balance DEFICIT SURPLUS Time path of the current account balance adjustment devaluation
59. Growing US Trade Deficit… engine of world growth but global financing pump! High trade deficit = large supply of dollars= downward pressure on $ exchange rate unless higher short-term interest rates by Fed
60. Booming US Current Account Deficit… -7% PBI = K inflows of US$2,2 billion/day