by Jeetendra.Imagine a world with two countries. If one country has a current account surplus, the other must have an equal and opposite current account deficit. More generally, the sum of the current account balance, of all countries, is zero.But what about the world's balance of payments? Many economists assume these must also sum to zero. For example, one often hears the claim that if one country is running a balance of payments surplus then others must be running deficits. Another argument often heard is that the RMB cannot become a reserve...
Tuesday, 5 July 2011
Thefrontiers of Nifty.Next steps on a href="http://ajayshahblog.blogspot.com/2011/06/interesting-readings.html">the SEBI story: a href="http://businesstoday.intoday.in/story/sebi-uk-sinha-idr-mutual-fund-entry-load-takeover-code-bimal-jalan/1/16420.html">An interview with U. K. Sinha, by Puja Mehra and Rajiv Bhuva, in Business Today. a href="http://www.livemint.com/2011/06/20213736/Is-8216go-slow8217-the-m.html?h=B">Mobis Philipose in the Mint. a href="http://businesstoday.intoday.in/story/income-tax-raids-on-sebi-members/1/16298.html">Uproar...
Sunday, 3 July 2011
Recently, India released BOP data. Many people, writing about this new data, wrote text such as: The current account deficit (CAD) moderated to 1.1% of GDP in Q1 from 2.2% in Q4 2010, due to an improvement in the trade deficit and a sharp rise in the invisibles surplus.Net capital inflows moderated sharply to 1.7% of GDP in Q1 from 2.9% in Q4, due to a steep fall in equity inflows and a moderation in debt capital inflows. This is wrong.Under a floating rate, the current account deficit is the same as net capital flows. Net capital flows finance...
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