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International Economics

• What it constitutes?

International Finance • What are its subfields?

Hamza Ahmad Qureshi • What are the usual values and figures used to describe the
economic situation?

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Instructor: H. A. Qureshi Instructor: H. A. Qureshi

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Economic Indicators

• What are the sources for this data?

• Do we need to memorize these values?

• What to do with these values?

Economic Indicators • What are the normal ranges? Max? Min? Average?

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Gross Domestic Product (Per Capita) Inflation

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Unemployment Government Budget Balances

Central Government Debt as % of GDP

2015 Data
Country/Region Budget Balance (%)

Euro Area −2.2

United States −2.5

China −2.9

Japan −7.0

India −4.1

Russia −1.5

Brazil −4.9

Pakistan -5.8
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Trade Balances
• How is it calculated?
Luxembourg 33
• Is positive balance good?
Russia 4.96
• What happens when country runs a trade deficit?
Japan -0.02
• What happens when country runs a trade surplus? USA -3.11
India -0.54 Trade Balance as % of GDP
• Trade Deficit → Debtor Country

• Trade Surplus → Creditor Country

China 2.49
Bangladesh -6.54
• Trade deficit in one year and Surplus in next year means? Vice versa?
Pakistan -7.42
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Instructor: H. A. Qureshi Instructor: H. A. Qureshi

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Net international investment position (NIIP) as % of GDP

International Investment Position Luxembourg 52.50

-39.60 Brazil
• How is it calculated? Russia 26.80
• How is it related to trade balance? Japan 62.80

• How IIP is similar and different from International Debt? -64.90 USA
-14.00 India
China 12.90
-13.50 Bangladesh

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Instructor: H. A. Qureshi Instructor: H. A. Qureshi

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IMF, WB and
Exchange Rates
• What was the traditional gold
standard for issuing currency

International Institutions & before 1920s?

• What led to end of the gold

Exchange Rate Regimes standard?

• What was decided in Bretton

Woods Conference?

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IMF, WB and • What was the Raison d’etre of IMF?

Exchange Rates • Why did the Gold-Exchange Rate Collapsed?

• What was the purpose of • What is IMF’s main agenda today?

IBRD & IMF?
• What is Third World Debt Crisis?
• What is the benefit of fixed
• Why is IMF criticized so much?
exchange rate?

• What was the Gold-Exchange

• What is Washington Consensus?
Standard? • Is there a moral hazard in seeking IMF Loans?
• What are capital controls?
• What are assigned quotas?

• What are SDRs & CFF?

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• Why was it established?

• What is the main source of funds?

• What are SALs?

• What are cofinancing agreements?

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Instructor: H. A. Qureshi Instructor: H. A. Qureshi

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Exchange Rate Regimes

• Who decides how to issue currency?

• What is the modern standard for issuing currency?

• Fixed vs. Fluctuating exchange range. Which is better?

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Instructor: H. A. Qureshi Instructor: H. A. Qureshi

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Country De jure De facto arrangement

arrangement
Pakistan Floating Floating
Bangladesh Floating Stabilized arrangement
China Managed floating Crawl-like arrangement

India
USA
Floating
Free Floating
Floating
Free Floating
Business Cycles
Japan Free Floating Free Floating
Russia Free Floating Free Floating
Brazil Floating Floating

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Business Cycles Analyzing Business Cycles

• What is a bubble? • Monetarism (Credit Cycle, Money Supply Growth)

• What caused 2008 economic meltdown? • Keynesian (Changes in Agg. Demand, Invest. Demand)

• What is a business cycle? • Austrian (Manipulation of Credit)

• What are recession and depression? How to differentiate?

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Instructor: H. A. Qureshi Instructor: H. A. Qureshi

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