Priyanka's Econ Blog

India’s Deficit November 29, 2010

Filed under: Section 4 — priyanka821 @ 1:58 am

The Indian current account is in a deficit of about -13. Over the 20 years the current account has fluctuated significantly between deficit and surplus. In 2004, it reached its peak surplus at about $7.5 billion. It is currently in a deficit of about $13.7 billion. India is a leading exporter in jewelry, gems, leather and others, and it has good services therefore boosting the current account. In terms of GDP the deficit is 2.9%. Luckily, India has enough foreign reserves to counter this course. The government is likely to buy its own currency to so that it depreciates and exports will boost. India’s GDP is $1296 billion and the GDP growth rate is 8.80%.

In the article “India’s current account deficit may widen to a record: Goldman“, it is predicted that the deficit will increase from 2.9% to 4%. This is because of short-term capital inflows and not foreign direct investment. Furthermore, because the standard of living is increasing in India, the demand for imports is increasing and this could slow the exports down creating a bigger deficit as the expenditure on imports will be more than the revenue gained by exports. Luckily, India has enough foreign reserves to counter this course. The government is likely to sell its own currency¬† so that it depreciates which in turn will boost exports. The deficit reached $13.7 billion in June whereas in 2009 it was merely $4.5 billion.

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International Economics “Explain” Reflection

Filed under: Section 4 — priyanka821 @ 1:24 am

I don’t think that international economics is one of my strong points. I find it rather confusing. I did well on this response, but it was not the best I could have done. I feel like I did not have enough time to write my answer. What I was missing was the long-term effects because I did not talk about the market’s ability to self correct. If I had included that, then I am sure my grade would have been higher.

 

Data Response : Tyres November 8, 2010

Filed under: Section 4 — priyanka821 @ 1:12 am

My problem was in my evaluation because I did not address the essential problem of the article. I did not write that the tariffs would negatively impact the relationship between the U.S. and China. Writing that a trade war between the two countries would start a trade war. Other than that I did will. I just had to bring it all together by using the evidence to say that Chinese government did not make a good choice.