The balance of payment is a statistical statement for a given period. It shows transactions in goods and services and income between an economy and the rest of the world. Changes in ownership and other changes in that country's monetary gold, SDRs and claims and liabilities.
The balance of payment is a statistical statement for a given period. It shows transactions in goods and services and income between an economy and the rest of the world. Changes in ownership and other changes in that country's monetary gold, SDRs and claims and liabilities.
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The balance of payment is a statistical statement for a given period. It shows transactions in goods and services and income between an economy and the rest of the world. Changes in ownership and other changes in that country's monetary gold, SDRs and claims and liabilities.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
“The balance of payment is a statistical statement for a
given period showing b) Transaction in goods and services and income between an economy and the rest of the world c) Changes of ownership and other changes in that country’s monetary gold, SDRs and claims and liabilities to the rest of the world ,and d) Unrequited transfers and counterpart entries that are needed to balance, in the accounting sense, any entries for the foregoing transactions and changes which are not mutually offsetting.” - The IMF publication, “Balance of Payments Manual.” Components of BoP Current account: - Merchandise exports and imports - Invisible exports and Imports Capital account: - Short-term - Long term Unilateral Transfer Account: - Gifts - Remittances Official reserves account:- Gold -convertible foreign exchange Balance of payment disequilibrium either a surplus or a deficit Factors causing Disequilibrium 1]. Economic factors Development disequilibrium Cyclical disequilibrium Lawrence W. Towle “Depression always brings about a drastic shrinkage in world trade, while prosperity stimulates it.” Secular disequilibrium Structural disequilibrium 2]. Political factors political instability wars change in world trade routes 3]. Social factors changes in tastes preferences, fashion, etc. Correction of Disequilibrium
Deliberate Measures Automatic Corrections
Monetary Trade measures Miscellaneous
measures measures 2) Monetary 2. Foreign loans contraction / 3. Incentives for expansions foreign investments 3) Devaluation/ 4. Tourism Revaluation development 4) Exchange control 5. Incentives for Export Promotion Import control inward remittances 2. Abolition of export 2. Import duties 6. Import substitutions duties 3. Import quota 3. Export subsidies 4. Import 4. Incentives prohibition