IBF Ch2&3

IBF Ch2&3 - Lecture 2: Ch 2 & 3 Ch 2: World...

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Lecture 2: Ch 2 & 3 Ch 2: World Trade and the International Monetary System Integration of the worlds markets The worlds markets for goods, services and financial assets and liabilities, have become increasingly integrated across national boundaries during the last several decades. Integrated market is one which equivalent assets sell for the same price in every location . Barriers to trade progressively fall, foreign markets play an increasingly important role in the viability of domestic industries. Cross-border integration of the Worlds financial markets Increased cross border financing as MNCs raise capital in whichever market and in whatever currency raises most attractive rates Increasingly interdependent national financial markets , including an increasing number of cooperative linkages among securities exchanges An increasing number of cross-border partnerships , including many international mergers , acquisitions and joint ventures. Cross-Border Integration of Markets for Goods and Services Global trend toward free -market economies Rise of regional and global trade pacts , including creation of WTO (1995) for negotiation and resolution of trade disputes. The 1999 creation of the euro , and its adoption by an expanding set of European countries. Balance of Payments The BoP tracks cross- border trade in goods, services and capital. ABS said the BoP is; “ a systematic record of economic transactions between residents of Australia and residents of the world”. Records all economic transactions between the residents of the home country and residents of other
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IBF Ch2&3 - Lecture 2: Ch 2 & 3 Ch 2: World...

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