Analyzing Account Balance & the Ability to Borrow from World Capital Markets

Analyzing Account Balance & the Ability to Borrow from World Capital Markets

Part 1

Go to the IMF website (Links to an external site.)at www.imf.org and find the World Economic Outlook database; then download data on the current account balance as a percentage of GDP for Greece, Spain, Portugal, Italy, and Ireland. Explain what happens to the current accounts of these countries after 2009 during the euro crisis. Analyze two reasons why these countries struggled to provide stability with their financial and monetary systems. Use this week’s lecture and assigned reading to inform your post. Respond to at least two of your classmates’ posts.

Part 2

Explain how a developing country’s decision to reduce trade restrictions, such as import tariffs, affects its ability to borrow in the world capital market. Analyze how a country can sustain its ability to borrow in capital markets, even when their economy struggles. Respond to at least two of your classmates’ posts.

Assignment Solutions