Balance of Payments

Descrição

Mapa Mental sobre Balance of Payments, criado por 17Y6C32 KOH HUI WEN em 11-12-2017.
17Y6C32 KOH HUI WEN
Mapa Mental por 17Y6C32 KOH HUI WEN, atualizado more than 1 year ago
17Y6C32 KOH HUI WEN
Criado por 17Y6C32 KOH HUI WEN mais de 6 anos atrás
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Resumo de Recurso

Balance of Payments
  1. BOP Surplus
    1. caused by...
      1. Current Account Surplus
        1. ↑ (X-M)
          1. ↑ AD
            1. trigger multiplier effect
              1. multiplied rounds of ↑ AD and ↑ RNY
                1. ↑ AD near full employment
                  1. DD-pull inflation
                  2. ↑ AD over Keynesian range
                    1. ↑ EG (actual growth)
                      1. Attract FDI
                      2. ↑ Employment
                2. ↑ DD for domestic currency
                  1. Exchange Rate Appreciation
                    1. M become relatively cheaper
                      1. ↓ Imported inflation
                        1. ↓ Cost of new technology
                          1. ↑ M of capital goods
                            1. ↑ Productivity, move up value chain
                              1. ↑ AS
                                1. ↑ EG (potential growth)
                          2. ↑ Profits when repatriated back to home country
                            1. ↑ Expected Rate of Return
                    2. Capital and Financial Account Surplus
                      1. ↑ FDI
                        1. Undesirable restructuring
                          1. Economy had not shifted to higher VA yet
                            1. Workers lack required skills to work in booming industry
                              1. ↑ Structural UnN
                          2. ↑ DD for domestic currency
                            1. Exchange Rate Appreciation
                              1. X become relatively more expensive in foreign currency/ M become relatively cheaper in domestic currency
                                1. ↓ X / Consumers switch from domestic G&S to M so Cd ↓
                                  1. ↓ AD, trigger reverse multiplier
                                    1. multiplied rounds of ↓ AD and ↓ RNY
                                      1. ↓ Employment
                                        1. ↓ EG (actual growth)
                                  2. ↓ Imported inflation
                                2. ↑ I
                                  1. ↑ AD
                                    1. trigger multiplier effect
                                      1. multiplied rounds of ↑ AD and ↑ RNY
                                        1. ↑ Employment
                                          1. ↑ EG (actual growth)
                                      2. ↑ Capital accumulation
                                        1. ↓ Unit cost of production
                                          1. ↑ SRAS
                                          2. ↑ Productive capacity
                                            1. ↑ LRAS
                                              1. ↑ EG (potential growth)
                                  2. Deficit somewhere else
                                    1. If deficit is persistent, risk BOP crisis
                                      1. ↑ Protectionism
                                        1. ↓ Trade
                                  3. BOP Deficit
                                    1. caused by...
                                      1. Current Account Deficit
                                        1. ↓ (X-M)
                                          1. ↓ AD
                                            1. trigger reverse multiplier effect
                                              1. multiplied rounds of ↓ AD and ↓ RNY
                                                1. ↓ AD over Keynesian range
                                                  1. ↓ EG (actual growth)
                                                    1. ↓ Employment
                                                    2. ↓ AD near full employment
                                                      1. ↓ DD-pull inflation
                                              2. M of capital goods
                                                1. ↑ Capital accumulation
                                                  1. ↑ Productivity
                                                    1. ↑ I
                                                      1. ↑ AS
                                                        1. ↑ EG (potential growth)
                                                        2. ↑ AD
                                                          1. trigger multiplier effect
                                                            1. multiplied rounds of ↑ AD and ↑ RNY
                                                              1. ↑ EG (actual growth)
                                                                1. ↑ Employment
                                                          2. ↓ Unit cost of production/ ↑ Productive capacity
                                                            1. ↑ AS
                                                              1. ↑ EG (potential growth)
                                                    2. Capital and Financial Account Deficit
                                                      1. ↑ DIA
                                                        1. ↑ Future Y inflows from abroad
                                                          1. ↑ Purchasing power
                                                            1. ↑ C
                                                              1. ↑ AD
                                                            2. Improve Current Account in the future
                                                              1. Improve BOP
                                                          2. ↓ FDI
                                                            1. ↓ I
                                                              1. ↓ AD
                                                                1. trigger reverse multiplier effect
                                                                  1. multiplied rounds of ↓ AD and ↓ RNY
                                                                    1. ↓ EG (actual growth)
                                                                      1. ↓ Employment
                                                                  2. ↓ Rate of capital accumulation
                                                                    1. AS ↑ at a slower rate
                                                                      1. ↓ Potential growth
                                                                  3. ↓ DD for domestic currency
                                                                    1. Exchange Rate Depreciation
                                                                      1. X become relatively cheaper in foreign currency/ M become relatively more expensive in domestic currency
                                                                        1. ↑ X / Consumers switch from M to domestic G&S so Cd ↑
                                                                          1. ↑ AD, trigger multiplier effect
                                                                            1. multiplied rounds of ↑ AD and ↑ RNY
                                                                              1. ↑ Employment
                                                                                1. ↑ EG (actual growth)
                                                                          2. ↑ Imported inflation
                                                                  4. Depletion of foreign reserves
                                                                    1. Borrowings, ↑ Foreign debt burden
                                                                      1. ↑ Interest payment
                                                                        1. ↑ Opportunity cost, ↓ M in the future
                                                                          1. ↓ Material SOL
                                                                        2. Need to sell domestic currency to pay back debt
                                                                          1. Devaluation/ Expected Devaluation
                                                                            1. Massive hot money outflows
                                                                              1. BOP further worsens
                                                                        3. ↓ Ability to ER intervention
                                                                          1. ↑ Vulnerability to speculative attacks
                                                                            1. BOP Crisis

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