The "Addiction" with FDI and Current Account Balance

The EU new member states (NMS) have been recipients of substantial net capital inflows in the form of FDI. Economic policy makers and development strategists often regard them as the pillar of the development and neglect their potential long run consequences: inevitable deficit in the investment balance. FDI however affects current account balance also indirectly by improving or deteriorating trade balance which might overweigh negative direct effects, moderate them, or add to the deterioration of the current account balance. Capital outflows through the investment account in NMS have been increasing rapidly . Namely, the rates of return on FDI are twice the rates of return on portfolio investments and three times the rates of return on loans. Indirect effects have moderated strong direct effects but could not overweigh structural current account deficit caused by transition. A major problem might arise as a consequence of the “addiction” with FDI. First, the outflows of capital speeded up by the opportunities of multinationals to reallocate production to the countries with even cheaper labor might become larger than new inflows. Second, sudden interruption of FDI inflows could result in an exchange rate crisis.current account, factors services, foreign direct investments

The dynamical balance, transport and circulation of the Antarctic Circumpolar Current

The physical ingredients of the ACC circulation are reviewed. A picture of thecirculation is sketched by means of recent observations of the WOCE decade. Wepresent and discuss the role of forcing functions (wind stress, surfacebuoyancy flux) in the balance of the (quasi)-zonal flow, the meridionalcirculation and their relation to the ACC transport. Emphasis will be on theinterrelation of the zonal momentum balance and the meridional circulation, theimportance of diapycnal mixing and eddy processes. Finally, new model conceptsare described: a model of the ACC transport dependence on wind stress andbuoyancy flux, based on linear wave theory; and a model of the meridionaloverturning of the Southern Ocean, based on zonally averaged dynamics with eddyparameterization

The phosphate balance : current developments and future outlook

Phosphate is essential for agricultural production and therefore plays a key role in the global production of food and biofuels. There are no agricultural alternatives for phosphate, and a substantial fraction of our annual phosphate consumption is dispersed into the environment where it is largely lost to agriculture. Phosphate is an irreplaceable, and to a considerable extent non-renewable, resource that is being exploited at an ever increasing rate. The ongoing depletion of phosphate resources combined with recently increased phosphate prices urge us to reconsider our phosphate consumption patterns. In addition to economic and geo-political reasons, further reducing phosphate consumption would moreover be beneficial to the quality of our environment. Even if we increase the reserve base, for which there are plenty of opportunities, it is clear that the phosphate industry will sooner or later have to make a switch from a reserve-based industry to a recycling industry

The Foreign Exchange Rate Exposure of Nations

Following the well-known approach by Adler and Dumas (1984), we evaluate the foreign exchange rate exposure of nations. Results based on data from 27 countries show that national foreign exchange rate exposures are significantly related to the current trade balance variables of corresponding economies.Exchange rate exposure, international trade, current trade balance

Breaking Up is Hard to Do: Global Co-Dependency, Collective Action, and the Challenges of Global Adjustment

Leistungsbilanz, Zahlungsbilanzungleichgewicht, Vereinigte Staaten, Current account balance, Balance of payments imbalances, United States

Impact of China's currency valuation and labour cost on the US in a trade and exchange rate model

Ricardian dynamic general equilibrium analyses show that under free trade arrangements a low income country with lower wage cost and large endowment of labour has comparative advantage in trade. Efficiency gains from this enhance economic growth and welfare of households simultaneously in both low income and advanced economies. Theoretical predictions are empirically validated here with structural VAR analysis based on quarterly data over the time period 1995:1 to 2009:1 on China's relative wage cost, interest rate differential, real effective exchange rate (REER), relative GDP and the US current account balance. It is shown how the relative prices of labour, capital and the currency affect the economic activity in China and current account balance in the US. With free capital inflows and outflows and restrictions on labour mobility, comparative advantage of China and the trade deficit of the US will both be minimised if China allows real appreciation of the Yuan and complete adjustment in prices. Higher production cost and prices in China could reduce welfare of Chinese households and the trade imbalance of the US, while higher relative GDP of China lowers the current account balance for the US

Fiscal policies, the current account and Ricardian equivalence

This paper analyses the empirical relationship between fiscal policy and the current account of the balance of payments and considers how Ricardian equivalence changes this relationship. To do so, we estimate a dynamic panel threshold model for 22 industrialised countries in which the relationship between the current account and the government balance is allowed to alter according to the government debt to GDP ratio. The results show that for countries with debt to GDP ratios up to 90% the relationship between the government balance and the current account is positive, i.e. an increase in the fiscal deficit leads to a higher current account deficit. For very high debt countries this relationship however turns negative but insignificant, suggesting that a rise in the fiscal deficit does not result in a rise in the current account deficit. Implicitly this result suggests that households in very hight debt countries tend to become Ricardian. Estimating the same model for the 11 largest euro area countries shows that the reationship between the govnerment balance and the current account turns statistically insignificant when the debt to GDP ratio exceeds 80%. JEL Classification: F32, E62, F41current account, Fiscal Policy, panel threshold model

Pressure balance at the magnetopause: Experimental studies

The pressure balance at the magnetopause is formed by magnetic field and plasma in the magnetosheath, on one side, and inside the magnetosphere, on the other side. In the approach of dipole earth's magnetic field configuration and gas-dynamics solar wind flowing around the magnetosphere, the pressure balance predicts that the magnetopause distance R depends on solar wind dynamic pressure Pd as a power low R ~ Pd^alpha, where the exponent alpha=-1/6. In the real magnetosphere the magnetic filed is contributed by additional sources: Chapman-Ferraro current system, field-aligned currents, tail current, and storm-time ring current. Net contribution of those sources depends on particular magnetospheric region and varies with solar wind conditions and geomagnetic activity. As a result, the parameters of pressure balance, including power index alpha, depend on both the local position at the magnetopause and geomagnetic activity. In addition, the pressure balance can be affected by a non-linear transfer of the solar wind energy to the magnetosheath, especially for quasi-radial regime of the subsolar bow shock formation proper for the interplanetary magnetic field vector aligned with the solar wind plasma flow.Comment: 8 pages, 2 figure

The new Nowhere Land? : a research and practice agenda for the “Always on Culture"

Purpose: Rapid developments in the field of information communication technology (ICT) mean that e-working has become increasingly common and prolonged – the “always-onculture” potential to enhance work-life balance via increased flexibility in terms of time and location, as well as posing the risk of being ‘always on’ has been identified with potentially serious implications for the health and performance of employees. We identify a research agenda and review current organizational practice. Approach: We discuss current technological developments as well as prevalent research frameworks and terminology in the domain of work-life balance and beyond to evaluate their fitness for purpose. We also report findings from a survey of 374 employees working within UK businesses about current organisational practice. Findings: Over half of the organisations sampled do not have clear guidance regarding worklife balance and supporting employees with regards to ICT enabled working. Key challenges are the sheer volume of email traffic, lack of training and infrastructure and an absence of appropriate support. Practical implications: Organisations need to develop clear policies regarding the psychosocial aspects of technology use and provide evidence-based guidance to managers and employees. Social implications: Managers and individuals require support to engage with technology in a healthy and sustainable way