Please enable JavaScript.
Coggle requires JavaScript to display documents.
Economic and Financial Flows in a Globalised World - Coggle Diagram
Economic and Financial Flows in a Globalised World
Balance of Payments
Capital Account
Capital Tranfers
Cross boarder investments
Current Account
Trade in Goods
Trade in Services
Income
Transfers
Financial Account
Infow / outflow
Non resident liability
Reserve Assets
Direct Investment
Portfolio Investment
Balancing Requirements
Global Imbalances
Effects
Recession
Reduced Demand
Surplus / Deficit Countries
Risk to global economy
Foreign Direct Investment (FDI)
Production and selling abroad
Economic Impact
FDI Data
Transfer Pricing
Def: Two companies, part of the same group trade with each other
Transfer Pricing Manipulation / Abusive Transfer Pricing
Arms length Principle (unrelated companies)
Unitary Taxation
Path dependency
Vested Interests
Technical Issues
Exchange Rate
Affecting import and exports
What sales are imported / exported?
Overseas competition
Value of change or currency
Foreign exchange Market
Determines exchange rate
High levels of demand = strong currency
Low levels of demand = weak currency
Supply and Demand
Elastic
Inelastic
Equilibrium
Overcoming Problems
Using same currency, eg Euro or Dollar
Operations in many markets to offset fluctuations
Advance purchase of currency at good price
Set contracts in own currency
Speculate changes
Government Intervention
Purchase own currency using foreign currency reserves
Increase interest rates
Regulation
Stewardship
National Economy
Investors
Borrowed Finery
Families of financial reporting, UK/US and Europe
Imperialism
Taxation
