Dear Anup.

Your question is very interesting, and surely research on the subject can help us to understand better.

I'm not a specialist on the subject, but I think no general answer would be correct. Each country according to the degree of openness it has at any given time is linked in a particular way with the rest of the world - an aggregate balance of payments result, is composed of different combinations of balances in the property account, services, factor income, current transfer, foreign investment, etc., and counts capital and financial with all its disaggregated -.

Given a certain level of foreigners in the national productive network, without changes in exchange policy - fixed terms of exchange with each of the countries - and keeping the rest of the variables constant. An increase in imports requires an increase in domestic savings or external indebtedness, the opposite in the case of an increase in exports. The concept "the international investment position" published by the Institutes of National Statistics allows us to know at any given time the holdings of financial resources (assets and liabilities) vis-à-vis the outside.

Emerging from extreme simplification, reality in complex good, and in today's world increasingly unpredictable. There would be an interdependent process between the dynamics of the international market and the local economy. The latter differs over time according to each reaction of the different sectors of the linked economies, the level of aliens - mergers and acquisitions, assets displaced between entities, quasisocities, and other actions to increase the financial valuation -, and policies implemented at the various levels of the State - foreign exchange control regime, import control and implementation of multiple indirect exchange rates -.

Sorry if I couldn't answer your question.

Greetings

Fernando

Estimado Anup.

Tu pregunta es muy interesante, y seguramente los investigares sobre la temática nos pueden ayudaran a comprender mejor.

No soy un especialista en el tema, pero creo que ninguna respuesta general seria correcta. Cada país de acuerdo al grado de apertura que tenga en un momento determinado se vincula de manera particular con el resto del mundo – un resultado agregado de la balanza de pagos, está compuesto por diferente combinaciones de saldos en la cuenta de bienes, servicios, renta de factores, transferencia corrientes, inversión extranjera, etc., y cuenta capital y financiera con todos sus desagregados –.

Dado un determinado nivel de extranjerización en el entramado productivo nacional, sin alteraciones en la política cambiaria – fijos los términos de intercambio con cada uno de los países–, y manteniendo constante el resto de las variables. Un incremento de las importaciones requiere aumentar el ahorro interno o el endeudamiento externo, lo opuesto en el caso de un incremento en las exportaciones. El concepto “la posición de inversión internacional” que publican los Institutos de Estadística Nacionales, permite conocer en un momento dado las tenencias de recursos (activos y pasivos) financieros frente al exterior.

Saliendo del extrema simplificación, la realidad en bien compleja, y en el mundo actual cada más impredecible. Se daría un proceso interdependientes entre la dinámica del mercado internacional y la economía local. Este último difiere en el tiempo según cada reacción de los distintos sectores de la economías vinculados, el nivel de extranjerización existente –fusiones y adquisiciones, activos desplazados entre entidades, cuasisociedades, y demás acciones para aumentar la valoración financiera –, y las políticas aplicadas en los distintos niveles del Estado –régimen de control de divisas, control de importaciones e implementación de tipos de cambio múltiples indirectos –.

Perdón si no pude responder tu pregunta.

Saludos

Fernando

Although several factors influence the Balance of Payments (BoP), focusing on a few might help. Think of the flow of funds in each of these:

• Exports from a country (goods {*services also-yet to a much smaller extent} flow out & funds flow into the country as payment
• Imports into a country (goods* flow in and funds flow out)
• Funds flow out (depending on the circumstances) with foreign aid (to other countries or entities therein**), grants**, gifts**, loans**, and the like.
• Funds flow in with the opposite of the above.

Generally, people and countries trade goods and services when they have a comparative advantage (i.e., a lower opportunity cost of providing a good than a trading partner). Unless the transportation, transactions, and other related costs are prohibitive, both countries benefit by trading.

Although it takes considerable time, floating exchange rates eventually help to move the flow of funds in the direction of balance; however, we should be careful to avoid over-generalizing and over-extending the impact of balance between exports and imports and the flow of funds related to it. Just to get a glimpse of it, think of the impact of a natural disaster on exports, imports and the flow of funds; simple metrics cannot capture what is best in all circumstances.

I hope this helps. Rob

surplus trade balance rather than deficit trade balance also have favorable effects on balance of payment