Chapter 2: The balance of payments

International Finance

Objectives

Objectives (cont’d)

Case Study 1: Trade Friction between Japan and the US

Trade Friction between Japan and the US (cont’d)

Two different views

Balance of Payments

Balance of Payments (BOP)

Three types of transactions recorded in BOP (1)

Example 1 of paired transactions

Balance of Payments Accounts

Table 12-2: US balance of payments accounts for 2003 (billions of USD)

Statistical Discrepancy

Official Reserve Transactions

Official Reserve Transactions (cont’d)

Slide 20

Table: Calculating the US Official Settlements Balance for 2003 (USD billion)

Slide 22

GDP Components

National Income Identity: Saving and Current Account

National Income Identity: Saving and Current Account (cont’d)

Slide 26

National Income Identity: Private and Government Saving

National Income Identity: Private and Government Saving (cont’d)

Case Study 1 (again!)

Case Study 2

National Income Accounts for the whole EU (percentage of GNP)

Case Study 2 (cont’d)

Slide 33

Case Study 3: Current Account Imbalances

Case Study 3:

Case Study 3 (cont’d)

Slide 37

Slide 38

Slide 39

Slide 40