international transaction
BOP
merchandise exports
net gold exports
merchandise imports
trade balance
net service, income and current transfer payments
the balance on the current account.
financial account
change in liabilities
direct investment
portfolio investment
financial derivatives
other investment
change in assets
direct investment
portfolio investment
financial derivatives
other investments
reserve assets
total identified financial transactions
measures of openness
unrecorded transactions
exports as a % of GDP
imports as a % of GDE
terms of trade
T=P_x/P_y T= terms of trade P_x = export price P_y = import price index
exchange rates
price of one currency in terms of another's
direct method or indirect method
direct how much of the local currency can be exchanged for one unit of the foreign currency this is also called the bilateral exchange rate
the other way round
spot vs forward
spot: the rate at which the forward exchange rate is bought
forward: forex bought and sold for delivery at a future date.
nominal and real exchange rate
effective exchange rates
the movement against all major currencies
can be real or effective
PPP
is the number of units of one currency that endows the holder with the same amount of purchasing power in another