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Author: Arturo Macías
Publisher:
ISBN:
Category :
Languages : en
Pages : 52
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Book Description
The International Investment Position records the value of foreign assets and liabilities of an economy in a given date. Its evolution is determined by the financial transactions of the Balance of Payments, which affects the volume of assets and liabilities, by differences in the valuation of the stock, derived from changes in prices or exchange rates, and by other adjustments, that are primarily reclassifications of foreign assets. The objective of this article is to compute the price and exchange rate effects implicit in the evolution of the International Investment Position of Spain, taking into account its possible limitations.The valuation effects are determined by the characteristics of the financial instrument and the information sources available for every heading of the IIP. In this article, disaggregated data by denomination currency of the instrument are used for every heading. On the other hand, for portfolio investment, asset-by-asset data available for 2003 and 2004 are used. In addition, for IED data, which are mainly not recorded at market price (and given that price changes for those instruments between 1993 and 2006 have been substantial), it is developed a methodology in order to reconstruct the value of IED assets and liabilities, including the valuation associated with price changes.The conclusions of this work for the Spanish case provide evidence that stock revaluation explains a very important share of the IIP changes for the latest years. The 55% of the increase of the IIP between 1993 and 2004 is related to value changes due to price or exchange rate changes. The accumulation of these value changes is equal to the 19% of the GDP of the year 2004. The decomposition of this effect between price effect and exchange rate effect can be estimated for 1997-2004 period, and the increase in the net IIP debt position (247.930 million euros) can be explained in a 52% by Balance of Payments transactions, and 47.3% is the result of revaluation of the instruments and other adjustments. This 47.3% can be decomposed in a 27.6% due to price effects, 10.1% due to exchange rate effects and the remaining 9.6% is the result of other non determined variations.
Author: Arturo Macías
Publisher:
ISBN:
Category :
Languages : en
Pages : 52
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Book Description
The International Investment Position records the value of foreign assets and liabilities of an economy in a given date. Its evolution is determined by the financial transactions of the Balance of Payments, which affects the volume of assets and liabilities, by differences in the valuation of the stock, derived from changes in prices or exchange rates, and by other adjustments, that are primarily reclassifications of foreign assets. The objective of this article is to compute the price and exchange rate effects implicit in the evolution of the International Investment Position of Spain, taking into account its possible limitations.The valuation effects are determined by the characteristics of the financial instrument and the information sources available for every heading of the IIP. In this article, disaggregated data by denomination currency of the instrument are used for every heading. On the other hand, for portfolio investment, asset-by-asset data available for 2003 and 2004 are used. In addition, for IED data, which are mainly not recorded at market price (and given that price changes for those instruments between 1993 and 2006 have been substantial), it is developed a methodology in order to reconstruct the value of IED assets and liabilities, including the valuation associated with price changes.The conclusions of this work for the Spanish case provide evidence that stock revaluation explains a very important share of the IIP changes for the latest years. The 55% of the increase of the IIP between 1993 and 2004 is related to value changes due to price or exchange rate changes. The accumulation of these value changes is equal to the 19% of the GDP of the year 2004. The decomposition of this effect between price effect and exchange rate effect can be estimated for 1997-2004 period, and the increase in the net IIP debt position (247.930 million euros) can be explained in a 52% by Balance of Payments transactions, and 47.3% is the result of revaluation of the instruments and other adjustments. This 47.3% can be decomposed in a 27.6% due to price effects, 10.1% due to exchange rate effects and the remaining 9.6% is the result of other non determined variations.
Author: Konrad Sobanski
Publisher:
ISBN:
Category :
Languages : en
Pages : 16
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Book Description
The aim of this paper is to evaluate the significance of the valuation effect in determining the dynamics of the net international investment position of CEE economies. For this purpose an analysis of BoP and IIP time series for the four largest CEE economies (Poland, the Czech Republic, Hungary and Romania) for the years 2005-2013 was carried out. The exercise revealed that the valuation effect (VE) is, in the short run, the key determinant of net IIP changes (for most observed years). Nevertheless, in the long-run its influence decreases as valuation gains and losses tend to cancel each other out. As the VE is relatively volatile, it is important to analyse its dynamics over the mid and long-term when evaluating the IIP. The significance of the VE for determining net IIP dynamics turned out to be non-investment-type specific because valuations of both the short-term and longterm investments contributed in a large part to the change in the net IIP. Similarities in the dynamics of the VE in CEE countries prove that the VE depends to a large extent on the general price fluctuations in financial markets that nowadays exhibit strong correlations across countries.
Author: Maurice Obstfeld
Publisher:
ISBN:
Category : Balance of trade
Languages : en
Pages : 64
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Book Description
"Gross stocks of foreign assets have increased rapidly relative to national outputs since 1990, and the short-run capital gains and losses on those assets can amount to significant fractions of GDP. These fluctuations in asset values render the national income and product account measure of the current account balance increasingly inadequate as a summary of the change in a country's net foreign assets. Nonetheless, unusually large current account imbalances, especially deficits, should remain high on policymakers' list of concerns, even for the richer and less credit-constrained countries. Extreme imbalances signal the need for large and perhaps abrupt real exchange rate changes in the future, changes that might have undesired political and financial consequences given the incompleteness of domestic and international asset markets. Furthermore, of the two sources of the change in net foreign assets -- the current account and the capital gain on the net foreign asset position -- the former is better understood and more amenable to policy influence. Systematic government attempts to manipulate international asset values in order to change the net foreign asset position could have a destabilizing effect on market expectations"--NBER website
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 9781557753397
Category : Business & Economics
Languages : en
Pages : 206
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Book Description
The fifth edition of Balance of Payments Manual, issued in 1993, presents revised and updated standards for concepts, definitions, classifications, and conventions for compilation of balance of payments and international investment position statistics that reflect the widespread changes that have taken place in international transactions since the fouth edition was published in 1977. As the international standard, the Manual serves as a guide for IMF member countries that regularly report balance of payments data to the IMF. The Manual contains significantly expanded and restructured coverage of financial flows and stocks and international transactions in services. Harmonization with the System of National Accounts and other IMF statistical systems is also greatly increased. See also companion volumes, the Balance of Payments Compilation Guide and the Balance of Payments Textbook.
Author: International Monetary Fund. European Dept.
Publisher: International Monetary Fund
ISBN: 147557276X
Category : Business & Economics
Languages : en
Pages : 64
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Book Description
This Selected Issues paper analyzes the drivers of firm productivity growth in Spain. Spain’s weak productivity performance has been linked to the dominance of many low-productivity small firms and inefficient allocation of resources. The biggest gain can be expected from lowering regulatory barriers to competition and the cost of doing business, including at the regional level. Further improving the access to equity and credit financing, in particular for innovative start-up companies, and addressing potential disincentive effects of size-contingent rules, can also make important contributions to raising productivity growth. Supporting innovation through increasing the efficiency of Research and Development (R&D) incentives and enhancing the private R&D investment should generate positive spillovers, which are difficult to capture empirically.
Author: Luciana Juvenal
Publisher: International Monetary Fund
ISBN: 1513525379
Category : Business & Economics
Languages : en
Pages : 67
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Book Description
This paper provides a dataset on the currency composition of the international investment position for a group of 50 countries for the period 1990-2017. It improves available data based on estimates by incorporating actual data reported by statistical authorities and refining estimation methods. The paper illustrates current and new uses of these data, with particular focus on the evolution of currency exposures of cross-border positions.
Author: Jannick Damgaard
Publisher: International Monetary Fund
ISBN: 1513521527
Category : Business & Economics
Languages : en
Pages : 54
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Book Description
Macro statistics on foreign direct investment (FDI) are blurred by offshore centers with enormous inward and outward investment positions. This paper uses several new data sources, both macro and micro, to estimate the global FDI network while disentangling real investment and phantom investment and allocating real investment to ultimate investor economies. We find that phantom investment into corporate shells with no substance and no real links to the local economy may account for almost 40 percent of global FDI. Ignoring phantom investment and allocating real investment to ultimate investors increases the explanatory power of standard gravity variables by around 25 percent.
Author: Philip R. Lane
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 66
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Book Description
Although Europe in the aggregate is a not a major contributor to global current account imbalances, its trade and financial linkages with the rest of the world mean that it will still be affected by a shift in the current configuration of external deficits and surpluses. We assess the macroeconomic impact on Europe of global current account adjustment under alternative scenarios, emphasizing both trade and financial channels. Finally, we consider heterogeneous exposure across individual European economies to external adjustment shocks.
Author: European Commission. Directorate-General for Economic and Financial Affairs
Publisher:
ISBN:
Category : Balance of payments
Languages : en
Pages : 36
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Book Description
On 14 February 2012, the European Commission presented its first Alert Mechanism Report (AMR), prepared in accordance with Article 3 of Regulation (EU) No 1176/2011 on the prevention and correction of macroeconomic imbalances. The AMR serves as an initial screening device, helping to identify Member States that warrant further in-depth analysis to determine whether imbalances exist or risk emerging. According to Article 5 of Regulation No. 1176/2011, these country-specific ?in-depth reviews? should examine the nature, origin and severity of macroeconomic developments in the Member State concerned which constitute, or could lead to, imbalances. On the basis of this analysis, the Commission will establish whether it considers that an imbalance exists and what type of policy follow-up it will recommend to the Council. For Slovenia, the AMR noted that two indicators in the scoreboard exceeded their thresholds in 2010 and suggested the need to assess the development and drivers of potential imbalances. The AMR explained that in the years before the crisis, Slovenia enjoyed strong growth and domestic demand conditions, coupled with some losses in price competitiveness and a gradual widening of the current account deficit. It identified signs that overheating occurred, particularly as regards private sector credit growth, construction value added and property prices. The Slovenian economy was hit hard by the global crisis and the AMR noted that this has brought some, perhaps temporary, adjustment in the external balance but this is still at an early stage. Against this background, Section 2 examines the external and internal dimensions of imbalances including developments in competitiveness, private sector indebtedness and in asset markets. This is followed by a closer look at the implications of indebtedness of non-financial corporations for the banking sector in Section 3. Section 4 presents possible policy considerations.
Author: Emmanuel O. Kumah
Publisher: International Monetary Fund
ISBN: 1451873891
Category : Business & Economics
Languages : en
Pages : 75
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Book Description
This paper analyzes the seven valuation methods for unlisted direct investment equity included in the recently adopted IMF Balance of Payments and International Investment Position Manual, Sixth Edition (BPM6). Based on publicly available Danish data, we test the three methods that are generally applicable and find that the choice of valuation method and estimation technique can have a highly significant impact on the international investment position, pointing to the need for further harmonization. The results show that the price-to-book value method generates more robust market value estimates than the price-to-earnings method. This finding suggests that the valuation basis for the forthcoming Coordinated Direct Investment Survey - own funds at book value -will provide useful information for compiling the international investment position.
