1) The UK had a current account deficit of £80 billion in 2016 according to the quick quiz.
2) The current account, capital account, and financial account make up the three components of a country's balance of payments.
3) A current account deficit means a country is a net borrower internationally, while a surplus means it is a net lender. The UK has had a persistent current account deficit for many years.
Lecture slides for an undergraduate course on Basic Macroeconomics that I taught in the Fall of 2007.
This lecture goes over the difference between real and nominal GDP.
Lecture slides for an undergraduate course on Basic Macroeconomics that I taught in the Fall of 2007.
This lecture goes over the difference between real and nominal GDP.
It shows the meaning of aggregate demand and aggregate supply. Why aggregate demand curve downward slopping? Show the Short run and Long run Aggregate demand aggregate supply.
International economics deals with the economic relations among nations. The resulting interdependence is very important to the economic well-being of most nations of the world and is on the increase. The economic relations among nations differ from the economic relations among the various part of a nation. This gives rise to different problems, requiring somewhat different tools of analysis, and justifies International Economics as a distinct and separate branch of “Applied” Economics.
International economics deals with
1) The Pure Theory of Trade. This examines the basis for trade and the gains from trade.
2) The Theory of Commercial Policy. This studies the reasons for and the results of obstructions to the free flow of trade.
3) The Balance of Payments. This examines a nation’s total payments to and total receipts from the rest of the world. These involve the exchange of one currency with others.
4) Adjustment in the Balance of Payments. This deals with the mechanism of adjustment to balance of payments disequilibria under different international monetary systems.
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.
A2 Macroeconomics - Revision on the Balance of Paymentstutor2u
The balance of payments (BOP) records all financial transactions made between consumers, businesses and the government in one country with other nations.
The current account measures the difference between money and credit going in and out of an economy (through exports, imports and income paid on assets both home and abroad)
It shows the meaning of aggregate demand and aggregate supply. Why aggregate demand curve downward slopping? Show the Short run and Long run Aggregate demand aggregate supply.
International economics deals with the economic relations among nations. The resulting interdependence is very important to the economic well-being of most nations of the world and is on the increase. The economic relations among nations differ from the economic relations among the various part of a nation. This gives rise to different problems, requiring somewhat different tools of analysis, and justifies International Economics as a distinct and separate branch of “Applied” Economics.
International economics deals with
1) The Pure Theory of Trade. This examines the basis for trade and the gains from trade.
2) The Theory of Commercial Policy. This studies the reasons for and the results of obstructions to the free flow of trade.
3) The Balance of Payments. This examines a nation’s total payments to and total receipts from the rest of the world. These involve the exchange of one currency with others.
4) Adjustment in the Balance of Payments. This deals with the mechanism of adjustment to balance of payments disequilibria under different international monetary systems.
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.
A2 Macroeconomics - Revision on the Balance of Paymentstutor2u
The balance of payments (BOP) records all financial transactions made between consumers, businesses and the government in one country with other nations.
The current account measures the difference between money and credit going in and out of an economy (through exports, imports and income paid on assets both home and abroad)
BOP or Balance of International Payments is the systematic and summary record of a country’s economic and financial transactionswith the rest of the worldover a period of time. As per IMF, BOP is a statistical statement for a given period showing: (a) transactions in goods & services and income between an economy and the rest of the world; (b) changes of ownership and other changes in that country’s monetary gold, SDRs, and claims on and liabilities to the rest of the world; and (c) unrequited transfersand counterpart entries that are needed to balance, in the accounting sense any entries for the foregoing transactions and changes which are not mutually offsetting. – IMF, Balance of Payments Manual.
This presentation discusses the importance of Trade. The presentation will look at exports, imports, balance of trade, FIPA, Trade agreements and FDI.
This presentation is about educating people on the importance of having trade deals, but the right deals to support economic growth for a country.
In this revision presentation we look at recent trends in UK trade union membership, consider how trade unions can affect both pay and employment and challenge the textbook view that union-negotiated pay increases inevitably have negative consequences for employment.
In this revision presentation we cover key examples of pure and quasi public goods and consider the arguments for and against an increase in government spending on public goods.
Poverty Reduction Policies in Low Income Countriestutor2u
This revision presentation covers some of the main causes of continued high levels of extreme poverty in low and middle income countries and considers a range of pro-poor government interventions designed to increase productivity and regular employment and waged income in formal labour markets.
You don’t need to produce a lot of evidence in your macroeconomics exams but knowing some basic and key facts and figures can make your answers stand out from the crowd! Here is a quickfire journey through twenty important economic numbers that won’t change before the exam – use them to support your answer and impress the examiner!
Microeconomics - Great Applied Examples for Examstutor2u
In this presentation, I have chosen loads of current examples that you might want to use as context in your microeconomics exams. We look at examples from different market structures, recent mergers and takeovers, the world's most valuable companies, the largest employer, unicorn business, de-mergers, the biggest initial public offerings (IPOs) and much else. Hopefully a useful video to go through to add some super examples into your revision notes.
This revision presentation considers the variety of stakeholders impacted by business activity. How will a change in objectives, such as a move from profit maximisation to revenue maximisation have an effect on different stakeholders?
This revision presentation looks at profit satisficing as an alternative objective for businesses. Why might firms satisfice? What are some of the possible consequences for economic welfare and efficiency?
In this short revision video, we look at the substantial productivity gap between the UK and many of the UK’s major competitor countries.
Paul Krugman, the Nobel Prize-winning economist said twenty fives years ago that “Productivity isn’t everything, but in the long run it is almost everything,”
In this presentation we consider the theory of wage-setting with a monopsony employer and the possible impact that a trade union might have on wages and employment. We also look at efficiency wage theory and mutual gains from pay bargaining between stakeholders.
For many economists, the labour market is the most important market of all to study, analyse and evaluate. Like product markets for goods and services, labour markets can also fail. The main types of labour market failure are labour immobility including skills gaps, inequality, disincentives to be economically active, labour market discrimination and the effects of monopsony power of employers.
Updated revision presentation on aspects of behavioural economics and topical issues where behavioural nudges are being used to change the choices of consumers and businesses.
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
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Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
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Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
2. Quick Quiz on the Balance of Payments
In 2016, what was the final value of the UK balance of
payments
A deficit of £80bn A surplus of £45bn
Zero
It was impossible to
calculate
8. The Current Account
• Current Account
• (1) Balance of trade in goods
• (2) Balance of trade in services
• (3) Net primary income (interest, profits, dividends and
migrant remittances)
• (4) Net secondary income (transfers i.e. contributions
to EU, military aid, overseas aid)
Note: The X-M (trade balance) is the figure used when calculating
aggregate demand
Note: FDI coming into the country will be a surplus on the financial
account but the repatriation of that firm’s profits back to its home
country will be a deficit on the current account
9. Items included in the current account of the BoP
• Finished manufactured goods, components,
raw materials
• Energy products, Capital technology
Trade Balance in
Goods
• Banking, Insurance, Consultancy
• Tourism, Transport, Logistics
• Shipping, Education, Health,
• Research, Cultural Arts
Trade Balance in
Services
• Profits, interest and dividends from investments
in other countries
Net remittance flows rom migrant workers
Net Primary Income
from Overseas
Assets
•Overseas aid / debt relief
•Military grants
•UK Payments to the European Union
Net Secondary
Income
10. The Capital Account
• Capital account
• Sale/transfer of patents, copyrights, franchises, leases
and other transferable contracts (example would be
international buying and selling of land by businesses)
• Debt forgiveness/cancellation (forgiving debt counted
as a negative)
• Capital transfers of ownership of fixed assets (i.e.
international death duties)
Note: The old capital account is now called the financial account. The
capital account in the new Balance of Payments system is now a tiny
part of the overall figure
11. The Financial Account
• Financial Account – includes transactions that result in a
change of ownership of financial assets and liabilities
between UK residents and non-residents
1. Net balance of foreign direct investment flows (FDI)
2. Net balance of portfolio investment flows (e.g.
inflows/outflows of debt and equity)
3. Balance of banking flows (e.g. hot money flowing
in/out of banking system)
4. Changes to the value of reserves of gold and foreign
currency
12. What is Foreign Direct Investment?
• FDI is investment from one country into another (normally
by companies rather than governments) that involves
establishing operations or acquiring tangible assets,
including stakes in other businesses
• Foreign direct investment flows:
1. Inward investment is a positive for the UK accounts
• E.g. an overseas business decides to build a manufacturing
factory in the UK
• A foreign retail firm invests to open new stores in the UK
2. Outward investment is a negative for the UK financial
account of the balance of payments
• Investment made overseas by UK businesses
13. What is Portfolio Investment?
• Portfolio investment happens when people / businesses
from one country buy shares or other securities such as
bonds in other nations.
• For example:
1. A UK investor might buy some shares in Google
(portfolio investment outflow for the UK)
2. A German investment bank might buy some of the
sovereign debt issued by the UK government (a portfolio
investment inflow for the UK)
• With share/equity investments , the standard definitions
of control use the internationally agreed 10% threshold of
voting shares although smaller % shares might be enough
to gain some ownership control/influence of bigger
companies
14. Balance of Payments Accounts in Summary
• Current Account
• (1) Balance of trade in goods
• (2) Balance of trade in services
• (3) Net primary income (interest, profits, dividends and migrant remittances)
• (4) Net secondary income (transfers i.e. contributions to EU, military aid, overseas aid)
• Capital account
• Sale/transfer of patents, copyrights, franchises, leases and other transferable
contracts (example would be international buying and selling of land by businesses)
• Debt forgiveness/cancellation (forgiving debt counted as a negative)
• Capital transfers of ownership of fixed assets (i.e. international death duties)
• Financial Account – includes transactions that result in a change of ownership of financial
assets and liabilities between UK residents and non-residents
• Net balance of foreign direct investment flows (FDI)
• Net balance of portfolio investment flows (e.g. inflows/outflows of debt and equity)
• Balance of banking flows (e.g. hot money flowing in/out of banking system)
• Changes to the value of reserves of gold and foreign currency
• Balancing item (estimated net errors & omissions)
• Overall balance of payments = zero
15. UK balance of payments in context
• The current account balance plus the financial account
measures the extent to which the UK is a net lender (that
is, in surplus) or net borrower (that is, in deficit).
• Countries that run current account deficits have to be net
borrowers in the international financial system.
• This is the case for the UK at present with a current
account deficit in 2015 of more than 5% of UK GDP
• Countries that run current account surpluses can be net
lenders i.e. they can export surplus US $s etc. in overseas
investment – a good example is China and their purchase
of US treasuries + investments made by Sovereign Wealth
Funds.
• Norway and Singapore also run huge trade surpluses
16. UK Trade Balance in Goods and Services
-8
-6
-4
-2
0
2
4
6
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annual trade balance measured as a percentage of GDP
Total trade balance Trade in goods balance Trade in services balance
18. UK Current Account Balance – The Long Run
-120000
-100000
-80000
-60000
-40000
-20000
0
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
BoP Current Account Balance – Annual - £ million
Financing the Current Account Deficit
The UK is running a historically high current account
deficit and this needs to be financed by net inflows on
the financial account of the balance of payments. In July
2016, the Bank of England noted that: “The financing of
the UK external deficit is reliant on continuing inflows of
portfolio and foreign direct investment, which have been
used to finance the fiscal deficit and corporate
investment, including in commercial real estate.”
19. Meaning of a deficit & a surplus on the current account
Current account deficit
This is an external deficit
Net outflow of income from the economy’s
circular flow
Deficit countries need to run a financial
account surplus
Might be achieved by attracting inflows of
financial capital from other countries
Current account deficit nations are debtor
countries
Current account surplus
This is an external surplus
Net inflow of income into the economy
Allows a country to run a financial account
deficit
External surplus countries may use
accumulated foreign currency reserves to
establish a sovereign wealth fun
Current account surplus nations are
creditor nations
20. Meaning of a deficit & a surplus on the current account
Current account deficit
This is an external deficit
Net outflow of income from the economy’s
circular flow
Deficit countries need to run a financial
account surplus
Might be achieved by attracting inflows of
financial capital from other countries
Current account deficit nations are debtor
countries
Current account surplus
This is an external surplus
Net inflow of income into the economy
Allows a country to run a financial account
deficit
External surplus countries may use
accumulated foreign currency reserves to
establish a sovereign wealth fun
Current account surplus nations are
creditor nations
21. Key Causes of a Current Account Deficit
Poor price and non-price competitiveness
• Higher inflation than trading partners
• Low levels of capital investment and research
• Weaknesses in design, branding, product performance
Strong exchange rate affecting demand for exports and imports
• High currency value increases prices of exports
• Appreciating currency also makes imports cheaper
Recession in one or more major trade partner countries
• Recession cuts value of exports to these countries
• Might be barriers to switching to other markets e.g. UK businesses struggle to sell
to emerging markets such as India, Vietnam, Mexico
Volatile global prices (e.g. soft and hard commodities)
• Exporters of primary commodities might be hit by a fall in world prices
• Importing nations could be hit by higher prices for oil and gas, raw materials
22. Expenditure Switching and Expenditure Reduction
Expenditure Switching Policies
• These are policies designed to change the relative
prices of exports and imports
• For example - an exchange rate depreciation ought to
improve the price competitiveness of exports and also
make imports more expensive
Expenditure Reducing Policies
• Policies designed to lower real incomes and aggregate
demand and thereby cut demand for imports
• E.g. higher direct taxes and an increase in interest rates
23. Expenditure Switching and Expenditure Reduction
Expenditure Switching Policy Instrument of Policy Evaluative Comment
Depreciation of the exchange
rate
Reduces relative price of
exports & makes imports
more expensive
Risk of cost-push inflation –
which erodes competitive
boost + fall in real incomes
Import tariffs Increases the price of imports
& makes domestic output
more price competitive
Risk of retaliation from other
countries if import tariffs are
used as BoP policy
Low rate of inflation (perhaps
deflation)
Keeps general price level
under control and makes
exports more competitive
Risks from deflation as a way
of achieving internal
devaluation – including lower
investment
24. Expenditure Switching and Expenditure Reduction
Expenditure Switching Policy Instrument of Policy Evaluative Comment
Depreciation of the exchange
rate
Reduces relative price of
exports & makes imports
more expensive
Risk of cost-push inflation –
which erodes competitive
boost + fall in real incomes
Import tariffs Increases the price of imports
& makes domestic output
more price competitive
Risk of retaliation from other
countries if import tariffs are
used as BoP policy
Low rate of inflation (perhaps
deflation)
Keeps general price level
under control and makes
exports more competitive
Risks from deflation as a way
of achieving internal
devaluation – including lower
investment
Expenditure Reducing Policy Instrument of Policy Evaluative Comment
Increase in income taxes Reduces real disposable
incomes causing falling
demand for imports
Cut in living standards and
risk of damage to work
incentives in labour market
Cuts in real level of
government spending
Lowers aggregate demand,
firms may look to export their
spare capacity
Damage to short term
economic growth, risks that
austerity hits investment
27. The J Curve following a depreciation
Time period after
depreciation
Trade
surplus
Trade
deficit
Currency
depreciation
here
Trade deficit may
grow in initial
period after
depreciation
The diagram below shows the “J Curve effect” – it shows the time
lags between a falling currency and an improved trade balance
28. The J Curve following a depreciation
Time period after
depreciation
Trade
surplus
Trade
deficit
Currency
depreciation
here
Trade deficit may
grow in initial
period after
depreciation
Net improvement
in trade provided
certain conditions
are met
The diagram below shows the “J Curve effect” – it shows the time
lags between a falling currency and an improved trade balance
30. Balance of Payments Key Terms
• The balance of payments (BOP) records all financial
transactions made between consumers, businesses and
the government in one country with other nations
• Inflows of foreign currency are counted as a positive entry
(e.g. exports sold overseas) – they are credit items
• Outflows of foreign currency are counted as a negative
entry (e.g. imported goods and services) – they are debit
items
• The current account of the balance of payments is the
main measure of external trade performance
• The financial account measures inflows and outflows of
financial capital across national boundaries
Key term Brief definition
Balance of Payments imbalances Persistent deficits or surpluses mainly on the current account
Current account balance
The current account measures the difference between money
and credit going in and out of an economy (through exports,
imports and income paid on assets both home and abroad)
Current account surplus When net external trade and income is positive
Current account deficit
When net external trade and income is negative leading to a net
outflow of demand from the circular flow
Effective exchange rate index The trade-weighted external value of a currency
Financial flows Flows of capital across national borders including debt and equity
Excess savings When gross national savings > gross capital investment
Capital (financial) account (BoP) Balance of investment flows into and out of a country
Depreciation Fall in the external value of one currency against another
Marshall Lerner Condition
A devaluation of a currency improves the BoP only if the
combined (or sum of) price elasticities of demand for imports &
exports are greater than one.