BUSINESS ECONOMICS_10310

2- Assignment

Policy Analysis of the Balance of Payments

The goal of this assignment is applying the basic principles trade to explain the state of a balance of payments in one country.

1. Decide with your teammate the country you want to analyse. (Japan)

2. Retrieve two of three graphs about the evolution of the balance of payments of your selected country from the IMF Data Mapper (http://www.imf.org/external/datamapper/index.php), which will be included as annex to your short paper.

3. Write your analysis about the current trade situation of your selected country including some of the following analytical elements (the relevance of the elements below vary from case to case)

3.1 Explain the causes of the surplus or deficit in the current account

1.1 Trade in goods

1.2 Trade in services

3.2. How has the country been able to offset the imbalance between current and capital account?

3.3. What is the role of reserves?

3.4. What other domestic policies are affecting trade in your country?

5.1. Monetary: interest rate and/bonds (increase or decrease spending on goods and services)

5.2 Fiscal: Taxes

5.3 Commercial: increase or decrease exports

3.5. Indicate how externalities may contribute to the explanation of policy choices (productivity, temporary decline in prices or raw materials).

4. Some other important elements should be taken into consideration:

a) Your explanation of the policy choices will require gathering information from other sources such as think tanks or policy papers. IMF, Wold Bank, OECD covering the period 2000-2014

b) The statistical annex should be brief based on graphs or table you have processed from databases.

c) Upload your analysis in BB by Friday, February 26th

d) The expectation is to deliver a 4-5 page explaining the policy choices of a country of your preference (except the United States) and a statistical annex.