ANDINERNAIONALLINKAGES跨國公司財務管理Jose

MultinationalFinancialManagement

AlanShapiro

7thEdition

J.Wiley&Sons

PowerPointsbyJosephF.Greco,Ph.D.CaliforniaStateUniversity,Fullerton1CHAPTER5

THEBALANCEOFPAYMENTSANDINTERNATIONALLINKAGES2CHAPTEROVERVIEWI. BALANCE-OF-PAYMENT CATEGORIESII. THEINTERNATIONAL FLOWOFGOODS, SERVICES,ANDCAPITALIII. COPINGWITHCURRENT ACCOUNTDEFICITS3

PARTI.

BALANCE-OF-PAYMENT

CATEGORIESA. THEBALANCEOFPAYMENTS (B-O-P) 1. PURPOSE: Measuresallfinancialand economictransactionsover aspecifiedperiodoftime.4BALANCE-OF-PAYMENT

CATEGORIES 2. Double-entrybookkeeping a. Currencyinflows=credits earnforeignexchange b. Currencyoutflows=debits expendforeignexchange5BALANCE-OF-PAYMENT

CATEGORIES 3. ThreeMajorAccounts: a. Current b. Capital c. OfficialReserves 4. CurrentAccount recordsnetflowofgoods, services,andunilateral transfers.6BALANCE-OF-PAYMENT

CATEGORIES 5. CapitalAccount a. Function:recordspublic andprivateinvestmentand lending. b.Inflows=credits c.Outflows=debits

7BALANCE-OF-PAYMENT

CATEGORIES 5. CapitalAccount(con’t) d.Transactionsclassifiedas 1.)portfolio 2.)direct 3.)shortterm8BALANCE-OF-PAYMENT

CATEGORIES 6. OfficialReservesAccount a.Function: 1.)measureschangesin internationalreserves ownedbycentralbanks. 2.)reflectssurplus/deficitof a.)currentaccount b.)capitalaccount9BALANCE-OF-PAYMENT

CATEGORIES 6. OfficialReservesAccount(con’t) b.Reservesconsistof 1.)gold 2.)convertiblesecurities

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CATEGORIES7.NetEffects:a.Sumofalltransactionsmustbezero:1.)currentaccount2.)capitalaccount3.)officialreserves11BALANCE-OF-PAYMENT

CATEGORIES8. TheBalance-of-paymentmeasuresa.SomeDefinitions:1.)BasicBalancea.)consistsofcurrentaccountandlong-termcapitalflows.12BALANCE-OF-PAYMENT

CATEGORIES1.)BasicBalance(con’t)b.)emphasizeslong-termtrends.13BALANCE-OF-PAYMENT

CATEGORIES1.)BasicBalance(con’t)c.)excludesshort-termcapitalflowsthatheavilydependontemporaryfactors.14BALANCE-OF-PAYMENT

CATEGORIES2.)NetLiquidityBalance:measuresthechangeinprivatedomesticborrowingorlendingrequiretokeeppaymentsequalwithoutadjustingofficialreserves.15BALANCE-OF-PAYMENT

CATEGORIES3.) OfficialReserveTransactionsBalance- measuresadjustmentsneededbyofficialreserves.16PARTII.THEINTERNATIONALFLOWOFGOODS,SERVICES,ANDCAPITALII. LINKSFROMINTERNATIONALTODOMESTICFLOWSA. GlobalLinkagessetofbasicmacroeconomic identitieswhichlink:domesticspendingandproductiontocurrentandcapitalaccounts17THEINTERNATIONALFLOWOFGOODS,SERVICES,ANDCAPITALB. DomesticSavingsandInvestmentandtheCapitalAccount1. NationalIncomeAccountinga. NationalIncome(NI)iseitherspent(C)orsaved(S)NI=C+S(5.1)18THEINTERNATIONALFLOWOFGOODS,SERVICES,ANDCAPITALb.Nationalspending(NS)isdividedintopersonalspending(C)andinvestment(I)NS=C+I(5.2)19THEINTERNATIONALFLOWOFGOODS,SERVICES,ANDCAPITALc.Subtracting(4.2)-(4.1)NI-NS=S-I(5.3)IfNI>NS,S>Iwhichimpliesthatsurpluscapitalspentoverseas.20THEINTERNATIONALFLOWOFGOODS,SERVICES,ANDCAPITALd. Inafreely-floatingsystem,excesssaving=thecapitalaccountbalancee. Implications:1. Anationwhichproducesmorethanitspendswillsavemorethanitinvestsdomesticallywithanetcapitaloutflowproducingacapitalaccountdeficit.21THEINTERNATIONALFLOWOFGOODS,SERVICES,ANDCAPITAL2. Anationwhichspendsmorethanitproduceshasanetcapitalinflowproducingacapitalaccountsurplus.3. Ahealthyeconomywilltendtorunacurrentaccountdeficit.22THEINTERNATIONALFLOWOFGOODS,SERVICES,ANDCAPITALC. THELINKBETWEENTHECURRENTANDCAPITALACCOUNTS1. BeginningidentityNI-NS=X-M (5.4)whereX=exportsM=importsX-M=currentaccountbalance(CA)23THEINTERNATIONALFLOWOFGOODS,SERVICES,ANDCAPITAL2. Combining(5.3)+(5.4)S-I=X-M(5.5)3.IfS-I=NetForeignInvestment(NFI)NFI=X-M(5.6)24THEINTERNATIONALFLOWOFGOODS,SERVICES,ANDCAPITAL4. Implications:a. IfCAisinsurplus,thenationmustbeanetexporterofcapital.b. IfCAisadeficit,thenationisamajorcapitalimporter.c. WhenNS>NI,theexcessmustbeacquiredthroughforeigntrade.25THEINTERNATIONALFLOWOFGOODS,SERVICES,ANDCAPITALd. SolutionsforImprovingCAdeficits:1.) Raisenationalincome(output)relativetodomesticinvestment(I).2.) Increase(S)relativetodomesticinvestment(I).26THEINTERNATIONALFLOWOFGOODS,SERVICES,ANDCAPITALD. GOVERNMENTBUDGETSANDCURRENTACCOUNTDEFICITS1.CURRENTACCOUNTBALANCECA=SavingSurplus-Gov’’tbudgetdeficit27THEINTERNATIONALFLOWOFGOODS,SERVICES,ANDCAPITAL2.CADeficitmeansthenationisnotsavingenoughtofinance(I)andthedeficit.3.CASurplusmeansthenationissavingmorethanneededtofinanceits(I)anddeficit.28PARTIII.COPINGWITHTHECURRENTACCOUNTDEFICITI. POSSIBLESOLUTIONSUNLIKELYTO WORK:A. CurrencyDepreciationB. Protectionism29COPINGWITHTHECURRENTACCOUNTDEFICITII.CURRENCYDEPRECIATIONA. U.S.Experience:Doesnotimprovethetradedeficit.30COPINGWITHTHECURRENTACCOUNTDEFICITB. Depreciationsareineffectivebecause1. Ittakestimetoaffecttrade.2. J-CurveEffectstatesthatadeclineincurrencyvaluewillinitiallyworsenthedeficitbeforeimprovement.31THEJ-CURVETIMENetchangeintradebalance0CurrencydepreciationTradebalanceinitiallydeterioratesTradebalanceimproves32COPINGWITHTHECURRENTACCOUNTDEFICITIII.PROTECTIONISMA.TradeBarriersused:1.Tariffs2.QuotasB.Result