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Questions tagged [international-economics]

Use for questions related to international trade, commercial policy, open economy macroeconomics, international finance, and exchange rates. It can also be used in financial and monetary policies, economic development, migration and factor movements, as long as they are specifically related to an ...

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A variable that captures the technological intensity of Foreign Direct Investment?

I am trying to come up with a variable that can be used to assess how intense in knowledge the agreggate Foreign Direct Investment a country receives is. My idea was to use Non Residents Patents/Total ...
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13 views

Can the USA really have an exchange rate policy?

I'm reading Martin Wolf's book The Shifts And The Shocks, about the global crisis. In it, there's a section where the author claims that the USA cannot not have an exchange rate policy, since all the ...
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21 views

multinational corporation to be a good global citizen

What incentives are there for a multinational corporation to be a good global citizen? How does this “fit” with the corporation’s obligation to its shareholders?
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9 views

IMF - International Finanacial Statistics accessibility

Do you know whether there might be some restrictions to balance of payments (in particular financial account) accessibility in IFS database of IMF? I am reading a lot of paper using time series from ...
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29 views

J Curve and DD Schedule in the Short Run (International Finance)

Assume that the J-curve is true. What would the DD curve look like during the early period of the J-curve (where the value effect dominates)? What would the effect of temporary changes in monetary ...
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1answer
58 views

Does National Savings equal zero in a closed economy? Please give an economic intuition

Context: $Y -(C+I+G) = X - M$ In a closed economy, $(X-M) = 0$ Notations Y --> Income/Output C,I,G --> Consumption, Investment and Government expenditure respectively. X --> Exports M --> ...
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9 views

Why holdings in offshore centers eventually wind up in the same pattern as those that go directly to other countries?

In this paper by Lane and Milesi-Ferretti (2008), the authors wrote: Nevertheless, to the extent that every dollar invested by a source country in an offshore center is invested by the offshore ...
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21 views

Why does the EU need a clearing centre to circumvent US sanctions against Iran?

As reported here and elsewhere, the EU is considering the creation of a clearing house to keep trading with Iran despite US sanctions. Why is it not possible for the EU to conduct normal financial ...
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36 views

how to find whether trade is possible between two nations [closed]

In the following image, we have U.S. and U.K. producing wheat and cloth in bushels/hour and yards/hour respectively. In all cases except in case D, given in the figure, trade is possible between ...
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15 views

How Turkish Lira downfall can impact Emerging Markets?

I am not an economics hot-shot, however how does the Turkish Lira downfall/depreciation will impact on emerging markets like Brazil and India. As per news reports, India have to pay extra $26 billion ...
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36 views

How does the cost of switching over to green energy compare to the cost of the war in Iraq?

How does the cost of switching over to wholly green technology in the US at current prices and at current technology without factoring in possible improvements in efficiency or technology solely in ...
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26 views

FM Global resilience index

I am interested in finding out witch is the explicit formula for computing the FM Global Resilience Index. I saw that the latest news on this is covered by https://www.fmglobal.com/research-and-...
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34 views

Is it better to tax only on what people spend?

I been recently pondering what might be the best tax system. I kept in mind that this tax system should have advantages for state, companies and for all people. Not people only. What I came up with ...
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1answer
32 views

What can explain increasing exports after default episodes?

I am going through a paper on sovereign default by Mendoza and Yue (2012), in which defaults are explained in terms of how firms that use foreign intermediate inputs lose access to international ...
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1answer
25 views

Emerging Market dollar debt, FX swaps and exchange rate risks

"An FX swap, on the other hand, creates no exchange rate risk for its counterparties. This is because currencies are sold and repurchase at fixed spot and forward rates. In other words, when you sell ...
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20 views

Different values of market capitalization from different sources

From World Bank, I have smaller values of market capitalization than the values from Econstats. The only difference I found is that in the first data source, the name is "Market Capitalization (...
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1answer
35 views

When can we expect China to become a developed country?

China has the 2nd largest GDP in the world and also has a high GDP growth rate. According to Richard Lynn's IQ and Global Inequality, the Chinese have a mean IQ of 105, which is one of the highest in ...
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17 views

Where to find bilateral data on FDI before 2001?

Where can I find bilateral data on FDI between countries over time (30 years)? On World Investment Report (WB) I could have this data for only years 2001-2012. And from CDIS (IMF) I found years 2008-...
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1answer
27 views

Where can I find data on market capitalization?

I am working on Home Equity/Bond Bias and need data to calculate the indicators of Home Equity Bias. So where can I find data on market capitalization (stocks and bonds) by year for each country? ...
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38 views

Why do large financial institutions make international transactions in digital currency?

I've heard that blockchain technology has been used extensively by financial institutions when making international transactions to eachother, with speed and transparency and cryptographic security ...
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25 views

What is the composition of official reserve account?

What is the composition of official reserve account? Is it just composed of mere foreign currencies which don’t earn any interest or it is made up of foreign bonds, securities and gold as well? If ...
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16 views

Dornbush model - relationship between i and S

In the Dornbush model, when we separate short and long run equilibrium. This is what I apparently have understood: SR1: an increase in Money Supply ($M_s$) leads to a fall in domestic interest rates (...
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18 views

Devaluation of exchange rate meaning

Pilbeam's textbook on International Finance (p. 106) says: (...) the immediate effect of a devaluation of exchange rate from $S_1$ to $S_2$ is to make domestic good competitive (...) How can be ...
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9 views

Debt Securities datasources inconsistence

From BIS Debt Securities Statistics I found out the International Debt Securities for all countries. I'm collecting data for the US, so I merely took the relevant lines of data for the US. From IMF ...
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10 views

US Treasury Bonds and China

What would be the impact of China withdrawing the purchase of US Treasury Bonds to fund the US Government debt? Who would be the US' creditor of the next resort?
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17 views

When finding targets in a trade war, does the goods balance or trade balance matter more?

By most measures, most people who look at trade balance, but it might include a good chunk of services imports/exports who might not be as readily subjected to tariffs.
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1answer
30 views

Terms definition in Balance of Payment

I have problems in distinguishing among terms in the Balance of Payment / the international balance sheet of a nation. As far as I know, on Assets and Liabilities sides of BPM, there are Portfolio ...
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113 views

What did Adam Smith mean by skill, dexterity and judgement?

Aspiring economist major here and I began reading Smith's "Wealth of Nations" today and, even a few pages in, do not completely understand the difference between the three due to the rather opaque ...
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1answer
31 views

Why shouldn't governments use Forex reserve to pay their debts?

India has around 470 billion USD in debt and has around 400 billion USD in forex reserves. So why should India or any other nations shouldn't use their forex reserves to pay off their external debt ?
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1answer
28 views

Generic bond yileds

I was looking on historical sovereign bond yields for a project. I was wondering what is meant by "generic bond yields" mentioned on bloomberg. Somewhere else i found data about the same country but ...
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2answers
620 views

Why would China and Russia selling the US' debt ruin the economy?

I was listening to an interview with David Harvey and he mentioned that if Russia and China were to sell the debt owed to them by the US, the US economy would take a serious dive. How would they sell ...
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3answers
56 views

Why does a strong dollar make imported goods cheaper?

I'm having a hard time visualizing why a strong dollar would make an imported good cheaper? If I buy an ounce of gold in the US for \$1,353.70 (todays rate) and I buy an ounce of gold in Europe, ...
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16 views

How can I separate actual investments from offshore investments?

My goal is to analyze the role of foreign direct investment as a driver of economic growth. But all statistics about foreign direct investments are kind of distorted. It includes offshore investments ...
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1answer
104 views

Impulse response functions?

I have a very basic model about a small open economy. This is a summary: $$ E_0\sum_{t=0}^{\infty}\theta_t U(c_t, h_t) $$ utility function: $$ d_t = (1 + r_{t-1})d_{t-1} - y_t + c_t + i_t + \...
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625 views

What exactly is the XX curve in the DD-AA model?

This is a short run analysis 1) What exactly is the XX curve? Is it the desired CA level? 2) Why is the XX curve flatter than the DD curve? Say on a point on the DD curve above the equilibrium level,...
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What type of collateral do firms in emerging markets use when borrowing from international lenders?

The literature in international finance assumes that firms can issue bonds and borrow up to some multiple of their own physical capital (see most small open economy models with financial frictions) ...
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50 views

Consequences of a positive uncovered interest rate parity (UIP) spread for an emerging market economy

Empirically we observe that the uncovered interest rate parity (UIP) does not hold; in fact the exchange rate adjusted return on an emerging market bond is higher than the return on US bonds; I know ...
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3answers
70 views

Why are aeroplanes not made in one place?

As an example, different parts of an Airbus A380 are produced in factories all over Europe, and then assembled in a factory in France. Transporting these massive objects must be incredibly expensive (...
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1answer
52 views

Why can we see the Current account as variation in NIIP?

Let's designate the Net International Investment Position(NIIP:it's the net international wealth of a country), as $B_t$. Why can we see the current account at time t, as $CA_t=B_{t+1}-B_t$ , when we ...
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2answers
113 views

How does Russia have so much foreign exchange reserves?

Source Russia is under U.S. sanctions. How does Russia have so much foreign exchange reserves?
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1answer
247 views

What's the economic effect of a country reducing its imports?

If a country enacts a program that successfully reduces its imports, eg: A 'buy local' advertising campaign A program of training mechanics to maintain older cars, rather than buying new imports An ...
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43 views

Foreign revenue streams as proxy for foreign investment

I have access to a very detailed dataset on the revenue streams of a large number of firms and their country of origin (in percentage of total revenue). Using other data, the international country ...
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1answer
1k views

How could the economic cost of the world not speaking the same language be estimated?

While languages are fun and add color and flair to cultures and make the world a more interesting place, they also have a cost. Beyond the monetary costs of translation/editing/proofreading, ...
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Why Yen grew stronger after North Korea's H-bomb threat? [duplicate]

Financial markets have had only a muted reaction to the dispute in recent months, but on Friday assets regarded as havens for investors jumped immediately after the news of North Korea’s latest H-...
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92 views

Under what conditions are tariffs or export subsidies expansionary?

Charles Kindleberger writes in the introduction to /The World in Depression/: The imposition of tariffs should be expansionary for the importing country, if contractive for the countries losing ...
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2answers
88 views

How is sending money out of a country draining its economy?

From this article: Every year, Mexicans working in the U.S. send at least $20 billion back to Mexico in the form of remittances, placing a huge drain on our economy. But I don't see what negative ...
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2answers
143 views

Why does every electronic transaction of USD legally take place on American territory?

In an article of a respected German newspaper (Die Zeit) I found the following statement (translation by me): 90 % of all foreign exchange trades are dealt in USD. Since every electronic ...
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1answer
181 views

How can the HKMA peg the Hong Kong dollar at 7.8 HKD/USD for so long?

A lot of pegged exchange rate systems don't stay pegged for so long (e.g. because the central bank run out of reserves to maintain their values) So far I understand that the HKD is 100% backed by the ...
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2answers
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What would happen if the US defaults on its debt?

As has been widely discussed already, the situation in Greece is considered more serious than in the US, as they have dollar-denominated debt and can only print Greek currency. The US, has the benefit ...
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3answers
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What is used more: economic growth rate compared to previous quarter (GPSA), or growth rate compared to the same quarter of the previous year (GYSA)

For my thesis I'm writing about the Baltic states and why they didn't vote out their incumbent governments despite undergoing severe austerity. As part of that I'm looking at their growth rates from ...