Risk,external adjustment and capital flows

This paper studies the process of external adjustment. I develop an open economy model with endowment and preference shocks that can account for the empirical behavior of real exchange rates, interest rates and consumption in the U.S. and Europe. The model includes cross border holdings of bonds and equity, and financial frictions that impede international risk-sharing. I find that external adjustment following endowment shocks predominantly takes place via trade flows, consistent with the intertemporal approach to the current account. In contrast, preference shocks that change investors' risk aversion induce adjustment via the trade and valuation channels; where the latter includes the effects of unexpected capital gains and loss on existing cross border holdings and changes in the expected future return differentials between foreign assets and liabilities. The model estimates imply that the valuation channel of external adjustment is more important for the U.S. than the trade channel. Consistent with this implication, I show that forecasts of future return differentials contributed most to the volatility of the U.S. net foreign asset position in the post Bretton-Woods era.     

Borrowing Without Debt? Understanding the U.S. International Investment Position

Sustained large U.S. current account deficits have led some economists and policymakers to worry that future current account adjustment could occur through a sudden and disruptive depreciation of the dollar and a sharp drop in U.S. consumption. Two factors that, to date, have cast doubt on such concerns are the stability of U.S. net external liabilities and the minimal net income payments made by the United States on these liabilities. We show that the stability of the external position reflects sizable capital gains stemming from strong foreign equity markets and a weaker dollar—conditions that could be reversed in the future. We also show that while minimal U.S. net income payments reflect a much higher measured rate of return on U.S. foreign direct investment (FDI) assets than on U.S. FDI liabilities, JEL Classification F21     

Integrating Foreign Languages and Cultures into U.S. International Business Programs: Best Practices and Future Considerations

This paper describes the importance of foreign languages and cultures and their integration into U.S. international business programs. The author juxtaposes globalization strategies of European and American business schools and highlights pre-university foreign language study in Europe and the U.S. The paper goes on to describe model U.S. undergraduate and graduate international business programs and their use of strategies that lead to professional proficiency. The author concludes with a discussion of strategies to be considered by U.S. business schools.     

金融危机对美国对外贸易、贸易收支和经济增长的影响

金融危机通过对美国进口的抑制作用和对美国出口的刺激作用,改变美国的对外贸易规模和结构。金融危机对美国对外贸易的影响将首先传导到美国的贸易收支账户,收缩美国的贸易逆差。美国贸易逆差的收缩将传导到美国的国民收入账户,在一定程度上支撑美国的经济增长。所以,美国正在通过对外贸易输出金融危机。     

A Life-Course Approach to Measuring Household Wealth

This paper illustrates how to measure per-period wealth and compares per-period wealth to more traditional measures, such as current net worth (current assets minus current liabilities). Per-period wealth differs from net worth in two major ways. First, per-period wealth adds future entitlements that are contingent upon survival, such as the present value of defined benefit pension and Social Security entitlements. Second, the wealth measure used here is measured as a flow instead of a stock. It is the amount of income that the present value of assets, liabilities, and contingent claims would earn each year in order to draw this present value down to exactly zero at the end of an individual's life. Three alternative strategies for calculating per-period wealth are illustrated in detail. Using the 1992 Survey of Consumer Finances, the U.S. distribution of per-period wealth is estimated using all three models and is contrasted against the distribution of conventional net worth. Furthermore, the sensitivity of the estimates with respect to the parameters of the model is discussed. The results suggest that the distribution of per-period wealth is less evenly distributed than the distribution of net worth.     

Evans,W. A. Advertising Today and Tomorrow. Great Britain: George Allen and Unwin, 1974

Abstract

This study reports on developments in the international advertising agency business during the 1970s. Findings suggest that U.S. agencies remain the dominant force in international advertising in contrast to the declining performance of U.S. industry in other sectors. Specifically, American agencies have found faster growth in their overseas markets leading to continually larger shares of their total billings; there has been a growing concentration in the international business of U.S. agencies and in the industry internationally; and, the international experience of U.S. agencies has led to a growing penetration of foreign markets, to growth in productivity, and to increasing domestic market power. Results of the study indicate however, that U.S. agencies may be facing increasing challenges from non-U.S. agencies in the future; notably from the West European, Japanese, and some developing countries.     

The effects of the saving and banking glut on the U.S. economy

We use a quantitative equilibrium model with houses, collateralized debt and foreign borrowing to study the impact of global imbalances on the U.S. economy in the 2000s. Our results suggest that the dynamics of foreign capital flows account for between one fourth and one third of the increase in U.S. house prices and household debt that preceded the financial crisis. The key to these findings is that the model generates the sustained low level of interest rates observed over that period.     

Trade and exposure of Eastern European multinationals

We find that about 19% of our sample of 149 Eastern European multinationals’ stock returns experienced economically significant exposure effects to the U.S. dollar for the period January 2000 to December 2004. The average exposure of the highly net exporting (importing) industry portfolios is positive (negative). Foreign exposure is found to increase with the evolution of net positions in U.S. foreign trade and with the industries’ degree of openness towards U.S. foreign markets. We also find that foreign exposure decreases with firm size.     

Decomposing the U.S. external returns differential

We decompose the returns differential between U.S. portfolio claims and liabilities into the composition, return, and timing effects. Our most striking and robust finding is that foreigners exhibit poor timing when reallocating between bonds and equities within their U.S. portfolios. The poor timing of foreign investors-caused primarily by deliberate trading, not a lack of portfolio rebalancing-contributes positively to the U.S. external returns differential. We find no evidence that the poor timing is driven by mechanical reserve accumulation by emerging market countries; rather, it is driven almost entirely by the poor timing of rich, developed (mainly European) countries. Finally, while poor foreign timing appears to be persistent across subsamples, other terms in our decomposition (the composition and return effects and U.S. timing abroad), as well as the overall differential, are sometimes negative, sometimes positive, and usually indistinguishable from zero.     

中国崛起背景下的涉外金融安全问题与对策

中国崛起背景下的涉外金融安全问题,主要表现在三个方面,即资本账户开放的安全问题、外汇储备资产或外汇资产的安全问题、国际支付结算体系的安全问题。导致中国涉外金融安全问题的外部原因是本币不具备储备货币的国际地位,需要从外部获得储备货币,必然缺乏安全;人民币汇率的信用依靠美元等储备货币背书,中国经济崛起也曾经依赖美元顺差;美国可以利用美元账户对资金、资产交易、跨境支付结算等,实施行政处罚、限制、冻结等制裁,乃至剔除出账户系统。内部原因是中国经济崛起,美国要打压和制裁;金融开放如果在汇率制度选择、外汇管制和管控上处理不当,允许储备货币资金完全自由进出而无约束,则必然存在金融危机的可能;国际收支失衡导致涉外金融缺乏安全。解决涉外金融安全问题应从四个方面着手:一是通过货币互换和多元化投资等方式保障外汇(储备)资产安全;二是通过提倡主权货币计价、支付、结算、融资,以及开展相关制度设计等方式建设好交易和支付结算系统;三是把握好资本账户开放;四是做好人民币国际化的基础工作。     

Foreign market entry mode of service firms: The case of U.S. MBA programs

While international expansion has become an important strategic imperative on the part of knowledge intensive service firms such as U.S. business schools, little empirical support is available on how these business schools enter foreign markets. If U.S. based business education programs are expected to prosper in light of the potential onslaught of international competition, expansion to overseas markets will be one of the most sought after options available. A poor choice in market entry strategy, or the lack of international market entry, can result in a negative impact on the educational institution. This research focuses on developing, measuring, and empirically testing a framework of key factors influencing international market entry mode choice of U.S. business schools by using primary data from faculty and administrators of U.S. Master of Business Administration (MBA) schools.     

Comparative Advantage and the Gains from Financial Trade: A Reappraisal

Emerging market crises have suggested that a national benefit‐cost assessment of external financial liberalisation could well prove unfavourable. This paper re‐examines the principle of comparative advantage in its application to financial trade to seek guidance on measures that might permit a fuller realisation of the potential benefits involved. Drawing a parallel with Balasubramanyam's work on the gains from FDI and international migration we distinguish between those arising in financial trade from the net transfer of capital, and those deriving from the contemporaneous exchange of financial claims or services of equivalent value. In the first interpretation a country's comparative advantage is manifested by its role in ‘intertemporal’ trade (as a borrower or lender). Our alternative emphasis is on the contractual risk‐return characteristics of the financial claims exchanged. This perspective is applied firstly to portfolio diversification gains arising from further international stock market integration. Secondly, price risk management for developing countries in international primary commodity trade is discussed. Both applications imply the need for significant institutional development but could realise approximately contemporaneous gains reminiscent both of those involved in merchandise trade and in the skills and product (or service) flows that Balasubramanyam has emphasised in relation to FDI and international migration.     

中国零售业如何应对金融危机的挑战

由美国引起的这场金融危机,已席卷全球,波及方方面面,从虚拟经济到实体经济、从国际到国内,从生产企业到流通企业,从进出口贸易到国内市场,无一不受波及和影响,都面临着考验和挑战。如何应付这场金融危机的冲击,是中国零售业必须面对的首要任务。     

U.S. International Deficits,Debt, and Income Payments: Key Relationships Affecting the International Outlook

A variety of issues and relationships will be of fundamental importance in determining the future paths of the U.S. current account, international debt position, and net international income flows. This paper describes the key relationships and presents projection results that illustrate the sensitivity of the outcomes to those relationships. Although the base case scenario presented in the paper shows a relatively benign outcome based on Blue Chip projections and the likely continuation of historical relationships, alternative projections help to illustrate the risks—and the potential sources of those risks— for a more adverse outcome for U.S. international deficits, debt and income flows. JEL Classification F21     

国际政治经济视角下美国对外贸易政策的分析

美国是当今世界贸易大国,它的对外贸易政策对我国经济发展有举足轻重的影响。深刻理解美国对外贸易政策有着重要意义。本文从美国的全球战略、政治因素和国际政治经济因素三个角度分析了美国对外贸易政策的本质,从而得出结论,美国对外贸易政策的目的是实现美国的国家利益。     

美元特权对美国贸易逆差的影响探析

美元特权的形成使贸易逆差成为输出美元的主要途径,并对贸易逆差起到了助长作用,集中表现在美元特权使美国维持着巨额贸易逆差而不受外汇储备短缺的制约和金融危机的威胁,却使其他追求美元储备的国家依靠贸易顺差和过度储蓄来摆脱不利处境,从而从供给和需求两个方面推动了美国贸易逆差的持续扩大。但贸易逆差的继续发展和未来的调整势必会影响美元特权地位的巩固,使世界经济特别是发展中国家的国际经济活动面临极大的风险。     

International currency exposures,valuation effects and the global financial crisis

We examine the evolution of international currency exposures, with a particular focus on the 2002–12 period. During the run up to the global financial crisis, there was a widespread shift towards positive net foreign currency positions, such that relatively few countries exhibited the archetypal emerging-market “short foreign currency” position on the eve of the global financial crisis. During the crisis, the upheaval in currency markets generated substantial currency-generated valuation effects — much of which were not reversed. There is some evidence that the distribution of valuation effects was stabilizing in the sense of showing a negative covariation pattern with pre-crisis net foreign asset positions.     

How to analyze foreign financial statements

To assess the financial performance and health of foreign competitors, or a proposed foreign acquisition, U.S. executives need to know how to assess foreign financial information and must understand the significant accounting differences among countries.     

A Cross Cultural Analysis of the Geographical Knowledge of U.S., Irish,Israeli, Mexican,and South Korean Business School Students

ABSTRACT

Geographical knowledge about foreign countries is considered to be a significant factor related to the successful marketing of goods and services in international markets-a not insignificant conclusion by experts given the sizable trade deficits run up by the United States in 2000 ($365 billion), 2001 ($346 billion), and 2002 ($435 billion).

Unfortunately, previous research has concluded that U.S. business school students-tomorrow's executives who will make decisions that will impact their firms' international operations-have inadequate levels of international geographical knowledge.

This article compares the geographical knowledge of U.S. business school students to that of business school students in four countries: Ireland, Israel, Mexico, and South Korea. The sub-par performance exhibited by the U.S. students and the impact of six independent variables on global geographical knowledge are used to develop a number of pedagogical conclusions designed to enhance the international geographical knowledge of U.S. business school students and students in foreign business schools and overcome the antipathy toward this subject matter that apparently exists within business schools and their various external constituencies.     

美国“特保案”的政治经济学解析

美国于2009年9月悍然违反国际贸易公平规则对中国输美轮胎"特保";中国迅速"亮剑",对美国部分汽车和肉鸡产品采取反补贴和反倾销调查,由此可能引发一场中美之间甚至世界贸易大战,影响深远。"特保案"的本质是贸易保护主义。面临全球金融危机下新一轮的贸易摩擦,中国出口企业治标治本的对策建议是树立信心和决心,反对"双输"贸易保护行为,促成新的"双赢"贸易规则;精研世贸协定各项条款及国际贸易法,善于借助外国法律全力维护中国企业正当利益;将单纯依靠低价、数量的贸易增长方式转向以质取胜,调整经营策略和结构,扩大内需,实现出口贸易转型升级,提高产品核心竞争力,降低外贸依存度。