国际金融 英文版 Chapter 2 总结

Chapter two

Payments among nations

Balance of payments国际收支平衡表---the set of accounts recording all flows of value between a nation’s residents and the residents of the rest of the world during a period of time.

>>show a wealth of information about a country’s international activities

一、Accounting principles

1. A credit item(+)---an item for which the country must be paid.

Examples: exports, purchases by foreign tourists, foreign investing in

government bonds

2. A debit item(-)---an item for which the country must pay.(import)

Examples: import, purchases by firms in foreign countries, purchases

by investors of foreign shares

3.Double-entry bookkeeping复式簿记---fundamental accounting

principle.

4.Double-entry bookkeeping’s key implication: if we add up all the

positive items (credits) and all the negative items (debits)in a country’s

balance of payment, the total will be zero.

5.Surplus---positive balance

6.Deficit---negative balance

二、A country’s balance of payments

◆Current account

---includes all debit and credit items that are exports and imports of goods and services, income receipts and income payments, and gifts.

1.Exports and imports of goods(merchandise) and services

Services: tourism, national trade transportation, insurance, education,

financial, technical, telecommunications, brand names.

2.Goods and services balance、trade balance、Goods/merchandise trade

balance ---all items for exports and imports of goods and services

3.Income flows---payments to holders of foreign financial assets

Include: interest, dividends, other claims on profits, payments to

foreign workers (short time stay)

4.Unilateral transfers---items that keeps track of gifts that the country

makes and gifts that it receives; private transfer(international migrant s’

remittances of money and goods back to their families in home country；

charitable giving)

5.Current account balance

◆Financial account

1.Financial account balance/financial account---net value of flows of

financial assets and similar claims(excluding official international

reserve asset flows)

2.the values in financial account are for the principal amounts本金for

assets traded. While any flows of earnings on foreign assets are in

current account.

3.Exporting financial assets/capital imports (+)

4.Importing financial assets/capital exports(-)

5.Foreign direct investment---any flow of lending to, or purchases of

ownership in, a foreign enterprise that is largely owned and controlled

by the entity(usually a multinational enterprise) doing this lending of

investing.

6.Indirect foreign investments include: international flows of

securities(bonds and stocks), loan, bank deposits.

7.International portfolio investment---investor does not own a large

share of the enterprise being invested in, but as a part of a diversified

portfolio. eg: bond or stock

◆Official international reserves---money-like assets that are held by

governments and that are recognized by governments as fully acceptable for payments between them.

1.Gold

2.Foreign exchange assets

3.Claims债权a country has on IMF: reserve position储备头寸

4.SDRs---special drawings rights---reserve asset created by IMF

◆Statistical discrepancy---net result of errors and omissions on both the

credit and debit sides.

1.For US: undermeasurement of private capital flows

2.For the world: tendency to underreport merchandise imports, income

receipts(特别是investment incomes), capital exports.>>people succeed

in hiding imports, foreign investment incomes, capital flight from own

government officials.

三、The macro meaning of the current account balance

1.Current account balance:

1)current account balance/CA= net foreign investment/I f

2)current account surplus= net foreign investment positive>>net lender净

债权国

3)current account deficit= net foreign investment negative>>net borrower

净债务国

4)national saving(S)=I d+I f>>I f =S-I d>>CA= S-I d

5)Domestic production (Y) = C + I d + G +(X – M)

National expenditure (E) = C + I d + G

Y=E+(X-M),so that CA = (X – M) approximately

CA = Y – E

Meaning of a current account surplus:

?The country has positive net foreign investment (a net lender)

?The country is saving more than it is investing domestically.

?The country is producing more than it is spending on goods and services. 2、

四、The macro meaning of the overall balance

1.overall balance---whether balance of payment has achieved an overall

pattern that is sustainable over time一定时期内

2.indicator:

I f=FA/financial account balance+OR/net flows of official reserve assets

Official settlements balance/B=CA+FA

B+OR=0

3.Economic Meaning of Overall Balance

If B is in surplus, there is an accumulation of OR (debit in OR)—the monetary authorities buy foreign currencies.Vice versa

America in 2007 vs. China in 2007

五、The international investment position

1.International investment position---statement of the stocks of a nation’s

international assets and foreign liabilities at a point in time (end of a year) 2.Lender or borrower: depend on whether its current account is in surplus or

deficit一段时期流量

3.Creditor or debtor: depend on whether its net stock of foreign assets is

positive or negative某一时点存量

4.U.S. International Investment Position