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Economic and financial flows in globalised world. Reading 4 - Coggle…
Economic and financial flows
in globalised world. Reading 4
The balance of payments
The capital account
net changes of assets and liabilities
during particular year
part of nation's balance of payments
The financial account
financial inflows
claims/liabilities to non residents
direct investments
portfolio investments
reserve assts
currencies commodities
financial capital held by monetary authorities such as Bank
the current account
import/export payments for goods/services
individuals incomes and money transfers to and from abroad
part of nation's balance of payemts
Accounts must be balanced
Good/Bad economy indicator
Global imbalances
Surplus - extra saving & Deficit - borrowing
global imbalance between countries
large persistence deficitis
surpluses in current, capital and/or financial accounts
possible instability to global economy
corrective actions
market forces
government actions
influencing exchange rates
stimulating export industries
Foreign direct investments FDI
Multinationals - operate in at least two different countries
important players in global economy
can be controversial due to its practice and operations
operational control
EU regulations
country regulations
portfolio investment - PIs
ownership of stock, bonds or other financial assets
Current trends
Falling oil prices
increased supply
increased energy sufficiency
Eurozone
combined surplus
Round the world big reduction in surplus accounts
Japan's surplus now zero
USA deficit halved
China surplus halved