Consolidated Balance Sheet of H Economy PDF

## Consolidated balance sheet of H economy * **A** = Assets * **L** = Liabilities | **A** | **L** | **Explanation** | |---|---|---| | KH EHH EHF B BHH BHF MH MHF BEK BHF | WH EHH EFH BH BFH 6HF MHF RHH MFH BFH | KH = Real Assets EH = Human Capital EHF = Equity of Foreign Assets B = Bonds, loan assets MH = Money 6HF = Foreign Assets - Foreign Liabilities MHF = Money, held by H, - Money, held by F BEK = Foreign Liabilities - Foreign Assets BHF = Foreign Liabilities | **Equations:** * **E** = equity. * **eHF** = EHF - EFH , Foreign Assets - Foreign Liabilities * **6HF** = BHF - BFH , Foreign Liabilities - Foreign Assets * **mHF** = MHE - MFH, Money held by H - Money held by F * **HF** = ZHF - ZFH , Assets - Liabilities **Net International Investment Position (NIIP):** * NIIP = NFA = net foreign assets * NIIP = NEW = net external wealth * NIIP = -NFU = minus net foreign liabilities * NIIP = NIIP = net international investment position **Total Assets, Liabilities, and Stock (St):** * **KH + zHF** = Stocks * **Wt** = KH + zHF (Stocks) * **4Wt** = KH +zHF (Flows) ## Balance of payments **New and Old Versions:** * **CA + KA = FA** (new version) * **CA + KA + FA = 0** (old version) **Components:** * **CA** (Current Account) = Export of goods, pay off loan, salary from abroad, Spain forgives foreign debt. * **KA** (Capital Account) = Capital transfers, NP NF assets * **FA** (Financial Account) = Direct investment, Portfolio investment, Other investment, Official reserves ## BoP - published BoP (countries, IMF, OECD) **Current Account Components:** *Goods *Services *Primary Income *-From work *-From investment (Y, Z= R^2HF. *Secondary Income **Capital Account Components:** *Capital transfers *NP, NF assets ## BoP - published BoP (countries, IMF, OECD) **Financial Account:** * **Direct investment** (DIB) * **Portfolio investment** (PIB) * Shares * Bouds * **Other investment** * Trade credit * Loans * Money * **Official reserves** ## CA and NIIP **Key Equation:** * **CA + KA + = FA** (KA =0) ## National income identity (NIA) **Key Equation:** * **Y = C + I + G + CA** **Table:** | Account | Abbreviation | Equation | CA | |---|---|---|---| | Gross national expenditure (spending) | GNE | YE | X | | Gross domestic product | GDP | YP | ✓ | | Gross national income | GNI | Y | ✓ | | Gross national disposable income | GNDI | Y | ✓ | ## Durable goods * **Ct** = Consumption of durable goods **Graph**: * **x** = 0, 1, 2, 3, 4, 5, t * **y** = 0, 2, 4, 6, 8, 10, Ct **Explanation:** * **New car:** ***H** (Home country): CA = Y - (C + I + G) > 0. ***F** (Foreign country): CA = Y - (C + I + G) < 0 * **Second-hand car:** * **H:** CA = Y - (C + I + G) < 0 * **F:** CA = Y - (C + I + G) > 0 ## Bretton Woods conference (1944) **Key figures:** * **Harry Dexter White (USA)** * **John Maynard Keynes (UK)** **New institutions:** * **IMF (International Monetary Fund):** balance of payments problems --> help. * **World Bank:** **Bretton Goods Objectives:** * Stable exchange rates (see figure 19-04) * Help in case of Bop crises ## FIGURE 19-1 **Exchange Rates Regimes of the World, 1870-2000** The shaded regions show the fraction of countries on each type of regime by year, and they add up to 100%. * **1870 to 1913:** the gold standard became the dominant regime. * **World War I (1914-1918):** most countries suspended the gold standard. * **late 1920s:** resumptions were brief. * **World War II (1939–1945):** most countries were fixed against the U.S. dollar. * **1970s:** more countries opted to float. * **1999:** the euro replaced the franc and the mark as the base currency for many pegs.

Consolidated Balance Sheet of H Economy PDF

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