ECO3701 Lecture Notes - Lecture 10: Portfolio Investment, Capital Account, Remittance
Document Summary
Chapter 8 trade and balance of payments. International finance - refers to the exchange of assets among countries. Open economy - is an economy where goods and services and funds can flow largely freely across borders (as opposed to import and export licensing and capital controls) Balance of payments - the value of assets by classification flowing between a country and the rest of the world. Goods and services trade balance - is the net value of exports and imports of goods and services. Current account balance - is the trade balance plus net income and net transfer payments. Capital account balance - is net direct, net portfolio, and net other investment. Reserve transactions - is the settlement with foreign treasuries and central banks using change in net reserve assets. The trade balance is the value of exported goods and services minus the value of imported goods and services.
