Overview
This module investigates the flow of monetary capital among countries. Balance of payments is the measurement of the aggregate flow of monetary capital in and out of a country. Emphasis turns to monetary transactions among countries with different currencies, examining foreign exchange markets and rates of exchange among currencies.
Discussion Requirement.
Balance of Payments
- Discuss KSA’s categories of balance-of-payments.
- Discuss why the supply and demand for foreign exchange are considered to be derived schedules.
- Discuss the meaning of a surplus (deficit) on the merchandise trade balance, goods and services balance, and current account balance? Discuss how this impacts trade in Saudi Arabia.
Directions:
- Discuss the concepts, principles, and theories from your textbook. Cite your textbooks and cite any other sources if appropriate.
- Your initial post should address all components of the question with a 500 word
Learning Outcomes
- Evaluate the implications of balance of payments, surpluses, and deficits on national economies.
- Critically evaluate the implications of surplus, balance, and deficit in a current account and capital and financial accounts.
Readings
Required:
Chapter 10 in International Economics
Chapter 11 in International Economics
Ibarra, R. & Tellez-Leon, I. (2020). Are all types of capital flows driven by the same factors? Evidence from Mexico. Empirical Economics, 59(1), 461-502. Retrieved from https://doi-org.sdl.idm.oclc.org/10.1007/s00181-019-01624-5
Recommended:
Chapters 10 and 11 PowerPoint slides
Harvey, J. (2019). Exchange rates and the balance of payments: reconciling an inconsistency in Post Keynesian Theory. Journal of Post Keynesian Economics, 42(3), 390-415. https://doi-org.sdl.idm.oclc.org/10.1080/01603477.2018.1548285