POL 2103 Chapter Notes - Chapter 61: Foreign Direct Investment, Fiscal Policy, Capital Account

• School: University of Ottawa
• Department: Political Science
• Course: POL 2103
• Professor: Kevin Mc Millan

Document Summary

Measures all international economic transactions between country a and all other countries in world in a given year. 3 parts: current account (balance of trade, capital account (balance of money, foreign exchange reserves. Current account: trade in goods (visible) and service (invisible) Capital account: patterns of investment (ownership of financial assets, either investments by citizens abroad or by foreigners in home country) Capital account: foreign direct investment: direct ownership of actual fixed assets in your country, international portfolio investment: stocks, bonds and other kinds of liquid investment, other investment: currency, bank deposits. Fiscal policy is government policies about government spending, taxes and borrowing. Mo(cid:374)etar(cid:455) is (cid:272)e(cid:374)tral (cid:271)a(cid:374)k"s poli(cid:272)ies a(cid:271)out (cid:373)a(cid:374)agi(cid:374)g i(cid:374)terest rates a(cid:374)d suppl(cid:455) of money in economy. Some central banks independent from politi(cid:272)al (cid:272)o(cid:374)trol (cid:894)ger(cid:373)a(cid:374)"(cid:455)s. Bundesbank); others tend to follow government direction (bank of england, Banque de france); us federal reserve and boc somewhere in between.