Description
Write an analysis that links your country’s trade to its financial flows, focusing around one particular issue, event, or policy. This could include the actions of a business. Length: as a rough guideline, aim for between 600 and 800 words of your own writing.
Here are some possible questions that this memo could be organized around. Please note that you would answer only one of these questions.
Identify a point at which the trade balance swings strongly from surplus to deficit, or vice versa. Explain why. Was this primarily a change affecting the current account, with the financial account adjusting? Or was this primarily a change affecting the financial account, with the current account adjusting?
If your country chronically runs a trade deficit or surplus, why? How is the deficit financed? What financial outflows correspond to a surplus?
If there are strong inflows or outflows of foreign investment, examine them and their effects on the overall balance of payments. You can do this from the point of view of a particular business located in your country. This might be a business that has received foreign financing, or a business that is engaged in direct investment in another country.
But you don’t need to use any of these questions. Coming up with a focus is a key part of the assignment. You are encouraged to contact me if you have trouble finding inspiration. However, please observe one constraint: this is an analysis of something that has actually happened — something in the past. Because the future has not happened, there are no facts about the future — people are making stuff up. Please don’t waste space talking about the future. No projections or forecasts.
This is an analytical memo, showcasing your analysis. It is not a report. Please do not fill it with undigested information. Please do not just pass on government propaganda (or anyone’s propaganda!).
It is not necessary to explain all 30 years of your country’s economic history. I encourage you to focus on a period of as little as 3-5 years. Additionally, as with the first memo, you do not need to have a conclusive explanation for everything. You are encouraged to note facts and events which are still mysterious to you, and explain why.
Sources: Your starting source is your country spreadsheets. It is a requirement that you draw your BoP data from the IMF, starting with the spreadsheets that I have uploaded for you on the Canvas site, and then going back to their site if you need more detail. Your BoP data is the baseline for this assignment. As for written sources, look for some variety of written sources about your topic. Start with library material and work out from there — material that you find free on the web is likely to be plagiarized or low quality.
Include a list of sources. The format is up to you, but all sources must include an author, a title, and a date. The author may be an institution, like “U.S. State Department.” Feel free to include urls, but a url by itself is not adequate. Credit sources carefully and thoroughly in the text. When I read any written work by you, it should be absolutely clear to me what is your thought and writing, and what is drawn from another source, and when something is drawn from another source, what source. You must use quotation marks and references whenever you use someone else’s writing. Mere paraphrase does not exempt you from this requirement. Remember that this assignment is meant to be your analytical work.
Goals of this assignment:
1. To link your data with written descriptions of events in your country: I will be looking for an effort to find explanations in written accounts for things you observe in that data, and efforts to look for confirmation in your data for things you read in the written accounts.
2. To get you used to linking the Current and Financial accounts in the Balance of Payments: The financial and current accounts are counterparts of each other — you can’t understand one side if you don’t grasp the other. So I will be looking for analysis that looks for the current-account counterparts of events affecting the financial account, financial-account counterparts of events affecting the current account. If you’re not sure about how to do this, ask me.
The memo will be evaluated on the degree to which it meets these goals, plus:
Structure: Is the memo focused around a clear point? Does it address that point in a well-organized way?
Clarity: Is the paper clear and specific in its analysis? Does it say who did what, or what caused what? Does it avoid vagueness? (See terms to be careful of (Links to an external site.).) Are linkages between one event and another explained clearly?
Use of data: Is the analysis clearly related to the relevant data? Are there clear links to the IMF BoP data? When data is used, is it clear what it shows?
Full sourcing and referencing.
I strongly encourage you to show me advance drafts.
IAS students should think of this memo as part of their portfolios. This assignment is an especially useful way to demonstrate your ability to work with data and convey conclusions supported by data.
