國際金融學(xué)課件：Chapter 1 The Balance of Payments

1、 INTERNATIONAL FINANCECourse structureThe balance of paymentsForeign exchangeExchange rate determinationMechanisms of international adjustmentExchange-rate adjustments and the balance of paymentsExchange-rate systems and currency CrisesMacroeconomic policy in an open economy international banking: b

2、anks role 2Course structure-13other subjects relationship with itfinanceInternational economyInternational businessInternational settlementFinancial marketInternational investmentREFERENCEInternational finance(seventh edition), Dennis R. Appleyard, published by the press “University of Peoples Repub

3、lic of China. 2012. fundamentals of multinational finance, Michael H. Moffett, Published by China Machine press. 2010.International finance,Yao dike, published by the press of University Fudan. 2012.international money and finance, Michael Melvin, published by the press “University of Peoples Republ

4、ic of China. 2010. English editionREFERENCE (in chinese)International finance(second edition), Lv Jianglin, Science Press, 2012. International finance(second edition), Jiang Boke, Fudan University.Chen YanShen Guobing(SHUFE to FUDAN)Chen BiaoruReference in ChineseFinal exam and scoreClass participat

5、ion (attendance + answer questions)HomeworkPresentationFinal exam achievementWebsitesHttp:/comTHE BALANCE OF PAYMENTS CHAPTER 1 Main Contents in Chapter 1Double-Entry AccountingBalance of payments structureWhat does a Current Account deficit (Surplus) mean? Balance of International indebtednessDoubl

6、e-Entry Accounting - basic conceptsBalance of payments-Record of the economic transactions Between the residents of one country and the rest of the worldDouble-entry accounting systemInternational transactionExchange of goods, services, or assetsBetween residents of one country and those of another1

7、31. Double-Entry AccountingResidents Businesses, individuals, and government agenciesThat make the country in question their legal domicileCredit transaction (+)Receipt of a payment from foreignersDebit transaction (-)Payment to foreigners141. Double-Entry AccountingWhich include in credit transacti

8、on (+)Merchandise exportsTransportation and travel receiptsIncome received from investments abroadGifts received from foreign residentsAid received from foreign governmentsInvestments in the host country by overseas residents151. Double-Entry AccountingWhich include in debit transaction (-)Merchandi

9、se importsTransportation and travel expendituresIncome paid on the investments of foreignersGifts to foreign residentsAid given by governmentOverseas investment by residents16How to register _ example1Suppose a Chinese exporter sells 2000 dollars of T-shirts to Wal-Mart store in New York, it will be

10、 registered in BOP as follow. Export Short-term claimsDebit Credit Debit Credit- - 2，000 2，000How to register _ example2Suppose a Chinese buyer buys 5000 dollars of laptops from New York, it will be registered in BOP as follow. import Short-term liabilitiesDebit Credit Debit Credit- - 5，000 5，000Int

11、ernational payments processIn theory: Importers in a country pay the exporters in that same country in the national currencyIn reality: Importers and exporters in a given country do not deal directly with one another. To facilitate payments, banks carry out these transactions1920International paymen

12、ts processFIGURE 1.11. Double-Entry AccountingTotal balance-of-payments account Must always be in balance why?How to register?Surplus: a subaccount is positive or all subaccounts are positive. Deficit: a subaccount is negative or all subaccounts are negative.21Chinas Balance of Payment of First 3 qu

13、arters of 2012Continuation-1continuation版稅促銷continuation2. Balance-of-Payments StructureCurrent account of the balance of payments Monetary value of international flows: Transactions in goods, services, income flows, and unilateral transfersMerchandise tradeAll of the goods one country exports or im

14、ports. Such as Agricultural products, machinery, autos, petroleum, electronics, textiles262. Balance-of-Payments StructureMerchandise trade balance Credit (+): the dollar value of merchandise exports- positive: merchandise trade surplusDebit (-): the dollar value of merchandise imports- negative: me

15、rchandise trade deficit272. Balance-of-Payments StructureServicesAll the services offered during exports/imports Goods and services balanceServices and merchandise trade accountJust as merchandise:If positive,Surplus of goods and services transactions;If negative,Deficit of goods and services transa

16、ctions28Note:mechandise trade balance +services=goods and services balance2. Balance-of-Payments StructureGoods and services balance-Net export of goods and services Positive:Excess exports over importsAdd to GDPNegative:Excess imports over exportsSubtract from GDP292. Balance-of-Payments StructureI

17、ncome receipts and paymentsNet earnings (dividends and interest) on one country investments abroadEarnings on one country investments abroad Minus payments on foreign assets in domesticCompensation to employees302. Balance-of-Payments StructureUnilateral transfersTransfers of goods and services (gif

18、ts in kind) or financial assets (money gifts) Private transfer payments Governmental transfers31The balance of international paymentsTwo categories:Autonomous TransactionsCompensatory TransactionsThe balance of payment equilibrium means the equilibrium on autonomous transactions excluding compensato

19、ry transactions.Current account balanceBalance on goods and services Investment incomeUnilateral transfers2. Balance-of-Payments Structure2. Balance-of-Payments StructureCapital and financial account Concept: Capital and financial transactions in the balance of payments, include All international pu

20、rchases or sales of assets and Private-sector and official transactionsDirect investment SecuritiesBank claims(credit) and liabilities(debits)342. Balance-of-Payments StructureBalance-of-payments statementCredit (+): capital and financial inflows Leads to the home countrys receiving payments from fo

21、reigners; or Export of goods and servicesDebit (-): capital and financial outflows Leads to foreigners receiving payments;or Import of goods and services352. Balance-of-Payments StructureOfficial settlements transactions（international reserve）Movement of financial assets among official holdersOffici

22、al reserve assets Liabilities to foreign official agencies Statistical discrepancyErrors and omissionsInformation some is collected, some is estimated3637U.S. reserve assets, 2008*TABLE 1.1Common drawing rights.IN Chinese “金衡制“38Gold reserves the first ten countries of 2010 december data from

23、 IMFCountry tonsReserve ratioCountry tonsReserve ratio1.U.S.813374%6.China10541.7%2.Germany340270%7.Switzerland104016%3.IMF2847 /8.Russia7757%4.Italy245269%9.Japan765 3%5.France243567%10.Netherlands61358%39the gold Price In international market 19912010 1 ounce=31.1035 gram Yeardollorsounce Yeardoll

24、orsounce 1991362.11 2000279.11 1992343.82 2001271.04 1993359.77 2002310.07 1994384.00 2003363.83 1995384.17 2004412 1996387.77 2005445.35 1997331.02 2006601.87 1998294.24 2007695.39 1999278.88 2008872 2009973 20101225The current gold prices in international marketThe current gold prices in internati

25、onal marketmonths K-line of gold The current gold prices in international market44Selected U.S. liabilities to foreign officialinstitutions, 2008*P7Mainly include China and Japan45U.S. balance of payments, 2008 (billions of dollars)*relations+=+=+=P846U.S. balance of payments, 19802008 (billions of

26、dollars)TABLE 1.4+= +=P9U.S. Balance of Payments2008, U.S. goods and services balanceSurplus on service transactionsMerchandise trade deficitOverall: deficit2008, U.S. current account deficit Excess of imports over exports（Goods, services, income flows, and unilateral transfers）47P8Problem:The parad

27、ox of capital flows from developing to industrial countriesSources of the net capital flow out of the developing economiesPhenomenon: uphill from-China, Japan, Russia OPECDivergent patterns of growth and investmentStructural differences，Between developing and industrial economiesCurrent account defi

28、cits in the industrial countries，maybe because increases in both public and private consumption and declines in national savings rates483. What Does a Current Account Deficit (Surplus) Mean?Current account deficitExcess of imports over exports Increase in net foreign claims upon the home nationForei

29、gn capital inflowsNet demander of funds from abroadWorsening of the home nations net foreign investment position493. What Does a Current Account Deficit (Surplus) Mean?Net borrowing of an economy Net borrowing by governmentBudget deficit: excess of outlays (G) over taxes (T)Private-sector net borrow

30、ing Excess of private investment (I) over private saving (S)50Two parts51The reasons of current account deficitCapital flows Are financing the current account deficit. If foreigners want to purchase U.S. financial instruments exceeding the amount of foreign financial obligations that Americans want

31、to hold, they must pay for the excess with the goods or services.Capital inflows keep the dollar stronger than it otherwise would beBoost importsSuppress exports52Current account deficit are Not efficiently reversed by trade policies that attempt to alter the levels of imports or exportsTariffsQuota

32、sSubsidies53The reasons of current account deficitU.S. current account deficit Financed by Borrowing from foreigners or Selling assets to foreigners or Large net debtorParadox in U.S. international transactions. U.S. residents have consistently earned more income from their foreign investments Than

33、foreigners earn from their larger U.S. investments543. What Does a Current Account Deficit (Surplus) Mean?3. What Does a Current Account Deficit (Surplus) Mean?Understanding(U.S.) Might be less burdensome than often portrayedNot a threat to total employment for the economy as a wholeDeficit = net inflow of foreign investmentC