by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Balance of Trade as a Balance of Payments? The connection between trade balances and international flows of financial capital is so close that economists sometimes describe the balance of trade as the balance of payments. Each category of the current...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How Does the Business Cycle Affect Trade Balances? In the short run, whether an economy is in a recession or on the upswing can affect trade imbalances. A recession tends to make a trade deficit smaller, or a trade surplus larger, while a period of strong economic...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What are Income Payments? Income payments on assets, as the name implies, is income resulting from ownership of assets – including, interest, dividends, rents, royalties, etc. The third component of the current account balance, labeled “income payments,” refers...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
Is it better to have a trade surplus or a trade deficit? Because flows of trade always involve flows of financial payments, flows of international trade are actually the same as flows of international financial capital. The question of whether trade deficits or...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Insider-Outsider Model? The insider-outsider model of the labor force, in simple terms, argues that those already working for firms are “insiders,” while new employees, at least for a time, are “outsiders.” A firm depends on its insiders to keep the...
