5

You seem to have it the wrong way around. The act of country A extending Most Favoured Nation status to country B only affects the import tariffs on country B's products, not those on other countries' products. MFN status means that the tariffs on the Most Favoured Nation's products cannot be higher than the lowest import tariff on similar products from ...


3

Table 2.2 of https://www.bea.gov/scb/pdf/2017/10-October/1017-international-services-tables.pdf suggests US exports of services to China in 2016 worth $\$54$bn and US imports of services from China in 2016 worth $\$16$bn Later parts of table 2.2 give a breakdown of types of services. Travel (for all purposes including education) - which should not ...


3

This is an excellent question and I will do my best to give you a well thought out answer. Many observers believe the U.S. dollar (USD) will lose its status as the world's reserve currency. In fact, I got pushback from another forum regarding finance about this. These doomsday dollar folks cite agreements between China and Iran on settling trade in their ...


3

That depends on your model of the world, and on how you define "goods and services". In a gold standard world, you essentially exchange goods and services with gold. Gold mining is therefore simply an expansion of the money supply. Adding gold to both the nominal and real side of the economy seems to me like today adding money as a good to GDP. If you do ...


3

You're doing the traditional mistake of people not familiar with Econometrics: You mistake correlation and causality. You look at a change in the USD, assume it to be exogenous, and then predict an impact onto the S&P. However, changes in the USD are not exogenous. For example, an increase in US productivity (compared to the productivity of firms in ...


3

Since we are not trading with aliens (yet), you are right in assuming the global account balance ought to be zero. Your data contradicts this because it is collected by numerous statistical agencies who differ in their capability and their methods. Examples for different outcomes could arise from: different degrees of border control. The fact that an export ...


3

They are very related concepts but they are not completely same. Current account deficit occurs when country spends more on imports than it receives in imports. Trade deficit means that more imports are being sold than exports by a country. A trade deficit is also a part of current account deficit as current account can be decomposed as: $$CA=X-M+NI+NT$$ ...


2

The data you're asking for doesn't exist. Most data on things like this are captured through the taxing authority, which means that there are entities that want to collect taxes and therefore care very much where you do something and where your inputs came from. That's very true when there are international borders involved, and it's true to a much lesser ...


2

I consider the very rapid growth of infrastructure in the BRIC countries to be a strong driver of the high oil prices (as well as other building commodities) in the mid-2000s. It takes a lot of energy to build roads, mine copper and iron, make cement, etc... I would disagree with two of the implications in the statement: "in the 2000's we witnessed the ...


2

According to the IMF's BPM6, which should be taken as the "most" standard, it is impossible for the BOP to be out of balance. In the IMF BPM6, BOP simply refers to a statistical statement (think of it as a piece of paper or an Excel spreadsheet) that records, in summary form, all of the country's international transactions. The BOP never refers to a number. ...


2

This depends on the exchange rate regime. For a floating exchange rate, the balance of payments is always in equilibrium, that is, the financial account always offsets the current (and capital) account. A hypothetical deficit is avoided by a depreciating exchange rate, a hypothetical surplus is avoided by appreciation. For a fixed exchange rate regime, the ...


2

It is recorded under the "Other investment" of the Financial Account. The BPM6, Chapter 6 divides the Financial Account into five portions: Direct investments. Portfolio investments. Financial derivatives (other than reserves) and employee stock options. Other investment. Reserves. "Other investment" (p. 111, BPM6) sounds unimportant , but is actually ...


2

Here is a reference by Feldstein, Krugman that is often quoted when discussing the FX neutrality of border tax adjustments: http://www.nber.org/chapters/c7211.pdf Another useful reference that takes a somewhat skeptical view and lists more references is http://voxeu.org/article/exchange-rate-implications-border-tax-adjustment-neutrality. All models ...


2

You get cheaper access to inputs. For a large advanced economy that is relatively diversified, it is possible that unilateral tariff reductions across many or all sectors can be good for the economy by freeing up resources presently occupied in low-value activities with few prospects to contribute to technological progress. The additional ease of doing ...


2

In general, no, it can't impose stricter rules on imports than it does on domestic production. Or more accurately, it could, but the countries exporting fur to Norway could challenge this. The guiding rule is that domestic industry cannot receive preferential treatment over importers. Norway can do it the other way around - that is to say, WTO rules would ...


2

As requested in comments: German banks lost a lot of money in the US sub-prime crisis and would have lost a lot more in Greece if the Eurosystem had not saved them. This is what might reasonably be expected if you run persistent trade surpluses: you gain foreign assets which may never be repaid or may be less valuable than you expected The European ...


2

The economics of trade can broadly be divided into two parts. There is a microeconomic part concerned with patterns of trade in particular kinds of goods, their causes such as factor endowments and costs, and effects on welfare, key concepts being comparative advantage and the gains from trade. Then there is a macroeconomic part concerned with overall ...


2

Natural resources and gravity determines trade. How the balance of payments is settled is not really important. But there are a few possibilities a country has a lot of debt and defaults or refis it down to a very low rate to go negative indefinitely; foreign aid; moneyprinting that isn't adequately adjusted in foreign exchange; selling overpriced domestic ...


2

To complement @1muflon1's answer (+1). Here are some definitions from the Deardorffs' Glossary of International Economics, a very reliable source of information. Trade deficit is simply defined as "Imports minus exports of goods and services." Regarding current account deficit. Let's first define the current account which includes trade: A country's ...


1

Its all relative when evaluating investments: A) It might be risky but pay a relatively high return. It could be the case that the local interest rates are high even taking into account a potential devaluation, or it could be the case that the investment is denominated in foreign currency, in which case the devaluation doesn't change the principal (...


1

I believe that the UN Comtrade database is the main data source for this kind of query with substantial country coverage. It's broken down by HS code. It has its issues. Reporting is based on national authorities, so you should usually expect data on imports to be more accurate than exports because of the tax implications (so Uganda's imports from Kenya ...


1

1- Some basic macroeconomic fundamentals I highly doubt a trade imbalance is causing high inflation. The trade deficit is likely happening because of economists call "Twin Deficits". I'll spare you the accounting that leads to this equation and present you a setorial balances identity. Let $S$ be private savings, $I$ be capital formation, $G$ be government ...


1

Considering that modern economies rarely experience recessions due to supply shocks (such as spiking oil prices), we should look at this from the perspective of a demand shock, a decrease in spending. This should not have too significant of an impact on the supply of exports. The supply for these depends on foreign demand, theoretically unaffected by the ...


1

It could be a sustainable economic policy. It depends. Assuming your government doesn't have a big budget surplus, it will have to replace revenue lost from tariffs -- i.e. raise other taxes. Most taxes are distortionary, i.e. discourage productive economic behaviour. Especially for less developed countries and countries with weaker international ...


1

Russia has been ramping up its production of oil since late 1990s after it defaulted on its debt. It has been maintaining positive trade balance since then. Also, notice in the above graph, Russia has had current account surplus for a long time. It is somewhat similar to saying that Russia has been a net lender to the rest of the world. The current account ...


1

russia uses its oil revenue to setup russia stabilization fund in 2004. The money in that fund is used to pay for national budget deficit. The foreign exchange reserve of Bank of Russia is not affected by the US led sanctions.


1

To answer the question, I feel it is needed to correct one misunderstanding first: trade deficit does not mean the government buys imported products more than it sells the exported products. Rather, it means the imported products are more than exported products, which does not indicate whether the products are consumed or invested by the government or the ...


1

The ONS Balance of Payments Pink Book gives the following figures for UK exports to Ireland (£million). The figures in Euros would be different, as would Irish reporting of the numbers, but there seems to have been a sharp drop in services exports from 2012 to 2013. 2016 data is due to be published in October 2017, though trade in goods numbers may already ...


1

The US borrows in its own currency. So it can always issue new currency to repurchase its own debt. And it mostly trades in its own currency, so when its currency gets devalued against the currencies of its trading partners, the trade imbalance is corrected. Argentina borrows in someone else's currency - the US dollar. So it cannot issue new currency to ...


1

Persistent trade or balance of payments deficits generate debt and other liabilities, either in the currency of the importer or in some foreign currency. This may be sustainable so long as lenders expect to be repaid in something of value. The United States borrows in dollars, and the general expectation among its creditors is that its debts will be ...


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