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Location: Macroeconomics Unit VI - Open Economy, International Trade and Finance
Discussion: Current Accout and Captial Account
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General Discussion
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rksung |
20. RE: Current Accout and Captial Account
Apr 29 2008, 5:47 AM EDT
Trade is a definitely a two way relationship. Right now, like a lot of people have said, China does have the upper hand in its trade with the US. People are appealing for a more open trade with China, but China has currency controls and other restrictions.
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agoldman |
21. RE: Current Accout and Captial Account
Apr 29 2008, 7:05 AM EDT
Both countries benefit to some extent. China exports and brings in tremendous money for doing so. In the U.S. people enjoy cheap goods - the fruit of specialization.
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jinnykwon0314 |
22. RE: Current Accout and Captial Account
Apr 29 2008, 8:25 AM EDT
Well the benefit of trade goes both ways in that both the countries involve get what they want or else why would anybody trade?
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CalebLiao |
23. RE: Current Accout and Captial Account
Apr 29 2008, 8:43 AM EDT
Why would I want to be China? Haha just kidding. I'd much rather be China. The amount of capital a nation holds is much more valuable to the nation in the long term. Since China's capital account in relation to its trade with the US is so large, it holds not only economical leverage over the nation, but all the perks that ensure from that leverage such as political influence.
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HowardJing |
24. RE: Current Accout and Captial Account
Apr 29 2008, 10:37 AM EDT
It seems to me (from the diagram in the wiki) that many countries who are exporting more than they are importing are developing countries, while countries that import more than they export are developed. Of course there are some exceptions, but for the most part I would want to have a negative current account.
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annieycsung |
25. RE: Current Accout and Captial Account
Apr 29 2008, 11:06 AM EDT
I agree with Caleb that China's resources are valuable on the long term. I would want to export more, as positive net exports would incur economic growth.
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ma.sheng.lun |
26. RE: Current Accout and Captial Account
Apr 29 2008, 11:08 AM EDT
Yea I agree with the statement that developing countries are the one that export more than they import. Part of the reason for that is because their standard of living isn't as high yet and cannot afford goods from more developed countries. But I think their standard of living will slowly increase and other countries will start to export goods into the developing country. Kind of like China.
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kl_0511 |
27. RE: Current Accout and Captial Account
May 1 2008, 1:41 AM EDT
Yes, usually the developing country exports while the developed counrty imports. However, the dollar value is dropping and it has become expensive for the U.S. to import goods and services. Thus, a developed country like U.S. may have to switch to increasing its exports.
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drewvenkatraman |
28. RE: Current Accout and Captial Account
May 4 2008, 5:03 AM EDT
I think that its hard to say that CHina has the upper hand, because proportionally speaking the u.s. is getting more bang for its buck than china is for export, both of these countries do need eachother
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