Mapping global financial interconnectedness: New statistics on cross-border flows and positions

Purpose. To classify the models of assets and liabilities of the Visegrad Group and compare them with similar indicators of Ukraines international investment position. Methodology. The separation of models is carried out by three criteria: the formation of the structure, the degree of risk and the activity of the state. The asset model of Ukraines international investment position is defined as dynamic, with low risk and moderate government intervention. The liability model is also dynamic, but with high risk and increased government activity. Ukrainian economic models are not similar to any of the studied European models and are irrational by most criteria. Finding. Based on the comparison of the models of assets and liabilities formed in Ukraine with similar indicators of the Visegrad Group countries, a number of hypotheses about the strategy of improving the international investment position of Ukraine have been expressed. The basis for solving these problems should be activities aimed primarily at solving the internal problems of Ukraine, which can improve the mechanisms of direct and portfolio investment. Originality. An original methodology for classifying the models of assets and liabilities of the countrys international investment position has been developed. Its approbation by the example of Visegrad countries and Ukraine allowed finding the strengths and threats of different models and predict future scenarios of changes in the international investment position. Practical value. The developed methods for assessing the models of international investment position of the country can be used in other studies, which will allow developing countries to choose a certain international model to develop their own strategy for managing international financial flows.

Trade Deficits: Causes, Effects and Remedies

Investment income covers income derived from a resident entity's ownership of foreign financial assets. This paper explores the impact of international investment positions on the investment income captured in balance of payments data. At First, international investment position and balance of payments are described including definition and relationships. And then, we analyze the balance of investment income and the rates of return on foreign assets and liabilities of China. Finally, this paper proposes policy suggestion on the direct investment income in China, the structure of net international investment position and investment income account will be improved.

The aim of this paper is to try to evaluate the impact of population ageing on Poland’s international investment position in the next five decades. To that end, a literature review was carried out along with a comparative analysis of measures of population ageing in Poland and other countries using logical deduction. The results of the study show that the expected intensive progress of population ageing in the 2020–2065 period will contribute to an increased demand for foreign capital, an increasingly negative international net investment position as well as unfavourable changes in the structure of foreign liabilities. The influx of foreign capital caused by population ageing might not translate into the expected maintenance of / increase in the rate of economic growth, while the substantial negative net international investment position may become a barrier to development in subsequent periods.

Subject. The article considers the debt economy of modern Russia. Objectives. The purpose is to describe Russia’s debt-laden economy. Methods. The study rests on systems approach, using the method of statistical analysis. Results. The study identified necessary links in the Russian economy, i.e. international investment position, balance of payments, external debt, debt of the non-financial sector and households on bank loans and issued debt securities, contracts for the purchase of dollars and yuan with tomorrow next settlements in rubles, volume of government bonds of the Russian Federation. The paper establishes active growth of the international investment position of the Russian Federation, with increasing frequency of its negative growth rates, in the context of a decrease in the growth rate of the balance of payments in the dynamics of the activation of compensatory mechanisms aimed at combating its reduction. The paper also reveals an increase in the dynamics of the debt of the non-financial sector and households on bank loans and issued debt securities at average values of their growth rates. The main methods of securitization of Russian assets are the weakening of ruble exchange rate and support for State corporations. Conclusions. The debt-based economy of modern Russia specifies opportunities for monetary authorities to replace foreign debt obligations and ensure the growth of the international investment position in a situation of declining balance of payments.

The IMF’s principal statistical publication, International Financial Statistics (IFS) Online, is the standard source of international statistics on all aspects of international and domestic finance. For most countries, IFS Online reports data on balance of payments, international investment position, international liquidity, monetary and financial statistics, exchange rates, interest rates, prices, production, government accounts, national accounts, and population. Updated monthly.

The article an attempt was made to trace the historical path of cooperation between Ukraine and the International Monetary Fund from the early 1990s, when Ukraine gained independence, to the present. The purpose of the International Monetary Fund's activity has been defined in Article I of the Fund's Statute and is to promote: international monetary cooperation; expansion and balanced growth of international trade;exchange rate stability, maintenance of proper exchange between participants; the creation of a multilateral system of payments for current transactions between members and the elimination of currency restrictions that impede the growth of world trade; reduction of terms and degree of imbalance of participants' balance of payments. The main task of Ukraine's cooperation with the International Monetary Fund is financial support and development of the economy as a whole, as well as its restructuring from a planned administrative type to a market one. In addition, Ukraine has been experiencing a difficult period since 2014 in the context of military conflict with the Russian Federation, as well as the loss of part of its territories that played an appropriate economic role in the country's life. The International Monetary Fund has become a major donor in such a difficult environment.The International Monetary Fund is a unique organization in the world in the number and diversity of member countries, while maintaining the status of a lender of last resort in the event of financial crises.The International Monetary Fund provides foreign currency loans to Member States for two purposes: to cover the balance of payments deficit (actually to replenish official foreign exchange reserves) and to support macroeconomic stabilization and structural adjustment of the economy (lending to government budget expenditures). As a result of the study, the authors concluded that Ukraine's cooperation with the IMF had several historical stages, characterized by its specificity and peculiarities. Also, cooperation between Ukraine and the International Monetary Fund has both positive and negative points. At the same time, without such cooperation, it is difficult, and often impossible, for Ukraine to maintain its balance of payments, forcing the country to continue working together with this reputable world institution.

The purpose of this research paper is to analyze the Krona (the Icelandic currency) from an investment perspective while determining what has influenced its recent value deterioration. The paper looks at many different variables that have influenced the currency since the 1980s. These factors include: Iceland’s market-based economy, the layout of their financial system, the exchange rate system, balance of payments, international investment position, and the fiscal/monetary policies that influence their society. When investing in this currency, it is vital to understand the importance of each of these factors and their role in the valuation of the currency as an investment. With the recent decline of the Krona’s value, recommendations are put forward regarding Iceland’s currency’s management. Due to the fact that their financial system has been the backbone of their economy over the last decade, they need to stabilize this system first and foremost. As soon as the economy will display signs of recovery, the government must take measures to curb the deficit and external debt, while encouraging the diversification of the Icelandic economy. Moreover, Iceland must do its best to join the Euro zone. In that context and from an investment approach; namely, trading the Krona, individuals should sell it if they have a short-term investment horizon. However, in the long-term ranging from three to five years, the currency promises modest return.

The article describes issues of structural reforms implementation in Russia directed at forming favorable institutional environment and business climate, as well as macroeconomic financial stability. The author analyzes the derivatives market, compared with the world’s GDP and considers regularities for the global market of mergers and acquisitions as modern crisis indicators in the global economy. The state of the Russian economy, the balance of payments of RF, international investment position and other macroeconomic parameters are analyzed, as well as the influence of cross-border capital flows and the demographic factor on sustainable development of the Russian economy. A model of the system of managing sustainable socio-economic development together with participation of development institutions is presented.

We revisit medium- to long-run exchange rate determination, focusing on the role of international investment positions. To do so, we make use of a new econometric framework accounting for conditional long-run homogeneity in heterogeneous dynamic panel data models. In particular, in our model the long-run relationship between effective exchange rates and domestic as well as weighted foreign prices is a homogeneous function of a country's international investment position. We find rather strong support for purchasing power parity in environments of limited negative net foreign asset to GDP positions; furthermore, long-run exchange rate equilibria may have little relation to purchasing power parity outside such environments. We thus argue that the purchasing power parity hypothesis holds conditionally, but not unconditionally, and that international investment positions are an essential component to characterizing this conditionality.

EU Structural Instruments–Key Component in Improving the Romanian Macroeconomic Stability?

Remiantis atliktų tarptautinių finansinių tinklų teorinių bei empirinių tyrimų analizės rezultatais, analizuojami tarptautinio finansinio tinklo identifikavimo ypatumai. Analizuojama metodika pritaikyta tarptautinio portfelinių investicijų tinklo atveju.

The study examined monetary policy regimes and the balance of payment in West Africa. The study's objective was to examine the effect of monetary policy regimes on the balance of payment in West Africa. The study adopted an ex-post facto research design and obtained secondary data from documents of the Central Banks of the WAMZ countries, the World Bank Development Indicator (WDI), and the International Monetary Fund (IMF) database from 2001 to 2021. The estimation technique employed was the Panel Autoregressive Distribution Lag model, complemented by the Juodis, Karavias, and Sarafidis (2021) granger-causality test. According to the findings, the various monetary policy regimes in West Africa had conflicting effects on the balance of payments. It demonstrates how that goal can be achieved in the short term using the money supply and monetary policy rate. However, over time, policy rate had a positive effect on the balance of payments, as the money supply was insignificant. These results are particularly importantcrucial given the goal of unifying the monetary policy regime in the ECOWAS in 2027. Based on the findings, the paper concluded and recommends that to achieve a balance of payment equilibrium in West Africa, the monetary policy rate is an effective tool, this is because it is significant in explaining the changes in the balance of payment in the countries in West Africa. Thus, monetary authorities should ensure a correct balance of the rate when to increase or decrease the policy rate with the hindsight of implications on the current account.

A model reflecting the monetary approach to the balance of payments was developed in the International Monetary Fund (IMF) in the 1950s. Its purpose was to integrate monetary, income, and balance of payments analysis, and it became the basis of the conditionality applied to IMF credits. Extremely simple, with primary focus on the balance of payments effects of credit creation by the banking system, the model has retained its usefulness for policy purposes over time, as it was adapted to changes in member countries’ priorities and in the international monetary system, in particular the disappearance of the par value system.

The study investigates the impact of macroeconomic policies on the balance of payment in Nigeria from 1981 to 2022. Three specific objectives guide the study; to examine the effects of government spending, government tax revenue, and monetary policy rate on balance of payment. Annual time series data were used for the study source from CBN Statistical Bulletin of 2022 edition. The expos facto research design was employment given the fact that the researcher does not influence the data variables. This was complemented by the Autoregressive and Distributed Lag (ARDL) model to analyzed the data. The result from the bound test shows that there is long run relationship between macroeconomic policies and balance of payment, and that balance of payment is expected to converge to equilibrium from the short run errors of disequilibrium by 106.23 adjustment speed. More so, government spending and tax revenue has negative effects on BOP in both short and long terms. While monetary policy rate has only long term significant and positive effect on BOP. The study concluded that the estimated model has a good fit and stable within the period of study. It is then recommended that government spending should be production motivated to enhance export and investment in portfolios. This will weaken the negative effects of the fiscal policy on BOP.