A disequilibrium in the balance of payments (BOP) refers to a surplus or deficit. A surplus occurs when total receipts exceed total payments, while a deficit happens when total payments are greater than total receipts. The BOP can be favorable or unfavorable depending on whether credits are greater or less than debits. Causes of disequilibrium include temporary factors, changes in national income, inflation, economic development stage, borrowing and lending amounts, exchange rate fluctuations, and political instability. There are also different types of disequilibrium such as cyclical, structural, short-run, and long-run. Too much disequilibrium can negatively impact a country's growth and competitiveness. Measures to address
Balance of Payment Disequilibrium and CausesNeema Gladys
1.Balance of Payment
The balance of payment of a country is a systematic accounting record of all economic transactions during a given period of time between the residents of the country and residents of foreign countries.
2.Componets of BOP
Current Account
It includes imports and exports of goods and services and unilateral transfer of goods and services.
Capital Account
Under this are grouped transactions leading to changes in foreign assets and liabilities of the country.
3. Accounting Treatment of Items (Debit and Credit Items)
Any item which gives rise to a sale of foreign exchange (an inflow) is recorded as a credit item (+) in the accounts e.g. export of goods and services
Any item which gives rise to the purchase of foreign exchange (an outflow) is recorded as a debit item (-) in the accounts e.g imports of goods and services.
4. BOP Disequilibrium
BOP is a double entry accounting record, then apart from errors and omissions, it must always balance.
The BOP deficit or surplus indicate imbalance in the BOP.
This imbalance is interpreted as BOP Disequilibrium.
A country’s balance of payments is said to be in disequilibrium when its autonomous receipts (credits) are not equal to its autonomous payments (debits).
5.BOP Deficit
A deficit or an unfavorable balance exists when the value of autonomous debit items exceeds the value of autonomous credit items.
6. BOP Surplus
A surplus or a favourable balance exists when the value of autonomous credit items exceeds the value of autonomous debit items.
A fantastic PPT on the foreign exchange rate. The PPT includes meaning and concept of foreign exchange and foreign exchange rate, the systems of determining foreign exchange rate, depreciation of domestic, appreciation of domestic currency, devaluation and revaluation of domestic currency. This PPT also explain the role of RBI in managing the exchange rate by using the concept of managed floating. Just download it and make your concepts stronger. Happy Learning !!
Balance of Payment Disequilibrium and CausesNeema Gladys
1.Balance of Payment
The balance of payment of a country is a systematic accounting record of all economic transactions during a given period of time between the residents of the country and residents of foreign countries.
2.Componets of BOP
Current Account
It includes imports and exports of goods and services and unilateral transfer of goods and services.
Capital Account
Under this are grouped transactions leading to changes in foreign assets and liabilities of the country.
3. Accounting Treatment of Items (Debit and Credit Items)
Any item which gives rise to a sale of foreign exchange (an inflow) is recorded as a credit item (+) in the accounts e.g. export of goods and services
Any item which gives rise to the purchase of foreign exchange (an outflow) is recorded as a debit item (-) in the accounts e.g imports of goods and services.
4. BOP Disequilibrium
BOP is a double entry accounting record, then apart from errors and omissions, it must always balance.
The BOP deficit or surplus indicate imbalance in the BOP.
This imbalance is interpreted as BOP Disequilibrium.
A country’s balance of payments is said to be in disequilibrium when its autonomous receipts (credits) are not equal to its autonomous payments (debits).
5.BOP Deficit
A deficit or an unfavorable balance exists when the value of autonomous debit items exceeds the value of autonomous credit items.
6. BOP Surplus
A surplus or a favourable balance exists when the value of autonomous credit items exceeds the value of autonomous debit items.
A fantastic PPT on the foreign exchange rate. The PPT includes meaning and concept of foreign exchange and foreign exchange rate, the systems of determining foreign exchange rate, depreciation of domestic, appreciation of domestic currency, devaluation and revaluation of domestic currency. This PPT also explain the role of RBI in managing the exchange rate by using the concept of managed floating. Just download it and make your concepts stronger. Happy Learning !!
Foreign capital and technology,Need of foreign capital,forms of foreign capit...Devika A K
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Curves are of different types and for different purposes. Some of the curves are utility curve, margin curves, demand and supply curve, offer curves, etc. International trade is based on international specialization. Copy the link given below and paste it in new browser window to get more information on Offer Curves:-
http://www.transtutors.com/homework-help/international-economics/analytical-tools/offer-curves.aspx
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The ppt is based on Balance of payment and Balance of trade, their meaning ,factors affecting them and difference between both i.e BOP & BOT.
i hope this presentation will be helpful to you , as everything is tried to fit in these slides. i suggest everyone to just go through the economics text book and gain more insights if one is very much interested in it.
please like the presentation and comment below your views about it.
follow me on slideshare for more informative power point presentations.
Foreign capital and technology,Need of foreign capital,forms of foreign capit...Devika A K
Foreign capital and technology,Need of foreign capital,forms of foreign capital,role of foreign capital,problems,foreign investments.theories of foreign investments,factors affecting foreign investments, advantages and disadvantages,policies in india
Curves are of different types and for different purposes. Some of the curves are utility curve, margin curves, demand and supply curve, offer curves, etc. International trade is based on international specialization. Copy the link given below and paste it in new browser window to get more information on Offer Curves:-
http://www.transtutors.com/homework-help/international-economics/analytical-tools/offer-curves.aspx
A power point presentation about India foreign trade's introduction, compostion of its imports and exports, also the direction of its imports and exports, with the help of some data diagrams.
Brief PPT on Balance of payment Vs Balance of TradeShubham Parsekar
The ppt is based on Balance of payment and Balance of trade, their meaning ,factors affecting them and difference between both i.e BOP & BOT.
i hope this presentation will be helpful to you , as everything is tried to fit in these slides. i suggest everyone to just go through the economics text book and gain more insights if one is very much interested in it.
please like the presentation and comment below your views about it.
follow me on slideshare for more informative power point presentations.
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This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
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2. A disequilibrium in the BOP means it is condition of
Surplus Or deficit
Surplus in the BOP occurs when Total Receipts
exceeds Total Payments.
Deficit in the BOP occurs when Total Payments
exceeds Total Receipts.
BOP DISEQUILIBRIUM
Thus, BOP= Favourable
CREDIT>DEBIT
Thus, BOP= Unfavourable
CREDIT<DEBIT
4. 1. Temporary Causes
It arises due to variations in the trade, effect
of weather on agriculture production etc.
2. National Income (the total amount of money earned
within a country) - Change in country’s national income leads to
disequilibrium
National income decreases=
Increases in imports=
Deficit in BOP
CAUSES
5. 3. Inflation
If there is inflation, prices of exports
increase, thus increase in export prices leading to
decline in exports and rise in imports result in
adverse.
→
CAUSES
6. 4. Economic Development
A country’s balance of payments also
depends on its stage of economic development. If a
country is developing it will have a deficit in its
balance of payments.
CAUSES
7. 5. Borrowings and lending
A country which gives loans and grants on a
large scale to other countries has a deficit in its
balance of payments on capital account.
On the other hand, a developing country
borrowing large funds from other countries may
have a favourable balance of payments.
CAUSES
8. 6. Change in exchange rate
This change arise due to change in exports
and imports. If exports are more then imports →
demand for its currency increase (exchange moves
in favours).
On the other hand if imports are more than
exports the → demand for the foreign currency
increase (exchange moves unfavour)
CAUSES
9. 1. Cyclical disequilibrium
Prosperity, recession, depression & recovery
2. Structural disequilibrium
Change in taste, technological advancement,
declaration of war, natural calamities
3. Short run disequilibrium
Troubles of calamities failures, earthquakes,
strikes, lockouts
4. Long run disequilibrium
Secular which occur over the long term.
Secular trends are not seasonal or cyclical. Instead, they
remain consistent over time.
TYPES OF DISEQUILIBRIUM
10.
11. Too much disequilibrium leads to deficit
trade position. It brings fall in country’s
growth.
It exhibits low competitive strength.
CONCLUSION