DB – Module 10: Balance of Payments and Foreign Exchange

Description

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

1. Evaluate the implications of balance of payments, surpluses, and deficits on national economies.
2. 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