class: top, left, middle background-image: url(https://media0.giphy.com/media/cJFQJzZxFMhONxDTnt/200w.gif?cid=6c09b952ib6bxzy74li8lofynkhfmhqaue0rgolki8u9afeg&ep=v1_gifs_search&rid=200w.gif&ct=g) background-size: 60% background-position: right # .huge[.Blue[**Global <br> Finance**]] <br><br> GLOA 610 --- class: inverse background-color: black background-image: url(https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcSm8iyhqitY7a6JP3AyfNXCxPzZGc6GM4DvPA&usqp=CAU) background-size: contain background-position: right ## .Large[Three Areas of Global 'Finance'] -- ## 1) Currency Exchanges (exchange rates) <br>: $7.5 tn .yellow[per day] (as of 2022) <br> <svg aria-hidden="true" role="img" viewBox="0 0 512 512" style="height:1em;width:1em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:green;overflow:visible;position:relative;"><path d="M224 320c0 17.69 14.33 32 32 32h64c17.67 0 32-14.31 32-32s-14.33-32-32-32h-64C238.3 288 224 302.3 224 320zM267.6 256H352c17.67 0 32-14.31 32-32s-14.33-32-32-32h-80v40C272 240.5 270.3 248.5 267.6 256zM272 160H480c17.67 0 32-14.31 32-32s-14.33-32-32-32h-208.8C271.5 98.66 272 101.3 272 104V160zM320 416c0-17.69-14.33-32-32-32H224c-17.67 0-32 14.31-32 32s14.33 32 32 32h64C305.7 448 320 433.7 320 416zM202.1 355.8C196 345.6 192 333.3 192 320c0-5.766 1.08-11.24 2.51-16.55C157.4 300.6 128 269.9 128 232V159.1C128 151.2 135.2 144 143.1 144S160 151.2 159.1 159.1l0 69.72C159.1 245.2 171.3 271.1 200 271.1C222.1 271.1 240 254.1 240 232v-128C240 81.91 222.1 64 200 64H136.6C103.5 64 72.03 80 52.47 106.8L26.02 143.2C9.107 166.5 0 194.5 0 223.3V312C0 387.1 60.89 448 136 448h32.88C163.4 438.6 160 427.7 160 416C160 388.1 178 364.6 202.1 355.8z"/></svg> $1tn, if only counting over-the-counter -- ## 2) Debt ($230 tn in 2023) -- ## 3) Other types of money flow <br> (e.g., remittances: $860 bn in 2023) --- class: inverse, bottom, right background-color: #37145A background-image: url(https://media.giphy.com/media/3oz8xMrLEYDnoHLbCE/giphy.gif) background-size: contain # .yellow[.Huge[First, Exchange Rates]] --- background-image: url(https://cdn.britannica.com/13/145313-050-852A6F13/Exchange-rates-Suvarnabhumi-International-Airport-Thai-Bangkok.jpg) background-position: right background-size: 30% ## **Exchange rates** -- ### = value of a currency compared to another's <br> = the .green[price] of a currency -- ### 1. .Yellow[nominal] exchange rates - .large[need to know when travel abroad <svg aria-hidden="true" role="img" viewBox="0 0 576 512" style="height:1em;width:1.12em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M482.3 192C516.5 192 576 221 576 256C576 292 516.5 320 482.3 320H365.7L265.2 495.9C259.5 505.8 248.9 512 237.4 512H181.2C170.6 512 162.9 501.8 165.8 491.6L214.9 320H112L68.8 377.6C65.78 381.6 61.04 384 56 384H14.03C6.284 384 0 377.7 0 369.1C0 368.7 .1818 367.4 .5398 366.1L32 256L.5398 145.9C.1818 144.6 0 143.3 0 142C0 134.3 6.284 128 14.03 128H56C61.04 128 65.78 130.4 68.8 134.4L112 192H214.9L165.8 20.4C162.9 10.17 170.6 0 181.2 0H237.4C248.9 0 259.5 6.153 265.2 16.12L365.7 192H482.3z"/></svg> : a-/depreciate)] - .large[instantaneously available] -- ### 2. .red[real] exchange rates - .large[.pink[actual] costs of things] - .large[estimates] (smaller or large than .blue[1]) - .large[nominal] ** `\(\times\)` ** .large[inflation rates: .purple[**under**]/.Blue[**over**]valued] -- ### overall, considered an indicator of .pink[competitiveness] --- # .large[But, what competitiveness?] -- ## : the .red[price] competitiveness of .green[tradables] -- ## .red[under]valuation: good for exports ('beggar-thy-neighbor') -- .pull-left[ .content-box-yellow[.Large[ ## importing a BMW <svg aria-hidden="true" role="img" viewBox="0 0 512 512" style="height:1em;width:1em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M39.61 196.8L74.8 96.29C88.27 57.78 124.6 32 165.4 32H346.6C387.4 32 423.7 57.78 437.2 96.29L472.4 196.8C495.6 206.4 512 229.3 512 256V448C512 465.7 497.7 480 480 480H448C430.3 480 416 465.7 416 448V400H96V448C96 465.7 81.67 480 64 480H32C14.33 480 0 465.7 0 448V256C0 229.3 16.36 206.4 39.61 196.8V196.8zM109.1 192H402.9L376.8 117.4C372.3 104.6 360.2 96 346.6 96H165.4C151.8 96 139.7 104.6 135.2 117.4L109.1 192zM96 256C78.33 256 64 270.3 64 288C64 305.7 78.33 320 96 320C113.7 320 128 305.7 128 288C128 270.3 113.7 256 96 256zM416 320C433.7 320 448 305.7 448 288C448 270.3 433.7 256 416 256C398.3 256 384 270.3 384 288C384 305.7 398.3 320 416 320z"/></svg> - <svg aria-hidden="true" role="img" viewBox="0 0 384 512" style="height:1em;width:0.75em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M64 240C46.33 240 32 225.7 32 208C32 190.3 46.33 176 64 176H92.29C121.9 92.11 201.1 32 296 32H320C337.7 32 352 46.33 352 64C352 81.67 337.7 96 320 96H296C238.1 96 187.8 128.4 162.1 176H288C305.7 176 320 190.3 320 208C320 225.7 305.7 240 288 240H144.2C144.1 242.6 144 245.3 144 248V264C144 266.7 144.1 269.4 144.2 272H288C305.7 272 320 286.3 320 304C320 321.7 305.7 336 288 336H162.1C187.8 383.6 238.1 416 296 416H320C337.7 416 352 430.3 352 448C352 465.7 337.7 480 320 480H296C201.1 480 121.9 419.9 92.29 336H64C46.33 336 32 321.7 32 304C32 286.3 46.33 272 64 272H80.15C80.05 269.3 80 266.7 80 264V248C80 245.3 80.05 242.7 80.15 240H64z"/></svg> 1 = <svg aria-hidden="true" role="img" viewBox="0 0 320 512" style="height:1em;width:0.62em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M160 0C177.7 0 192 14.33 192 32V67.68C193.6 67.89 195.1 68.12 196.7 68.35C207.3 69.93 238.9 75.02 251.9 78.31C268.1 82.65 279.4 100.1 275 117.2C270.7 134.3 253.3 144.7 236.1 140.4C226.8 137.1 198.5 133.3 187.3 131.7C155.2 126.9 127.7 129.3 108.8 136.5C90.52 143.5 82.93 153.4 80.92 164.5C78.98 175.2 80.45 181.3 82.21 185.1C84.1 189.1 87.79 193.6 95.14 198.5C111.4 209.2 136.2 216.4 168.4 225.1L171.2 225.9C199.6 233.6 234.4 243.1 260.2 260.2C274.3 269.6 287.6 282.3 295.8 299.9C304.1 317.7 305.9 337.7 302.1 358.1C295.1 397 268.1 422.4 236.4 435.6C222.8 441.2 207.8 444.8 192 446.6V480C192 497.7 177.7 512 160 512C142.3 512 128 497.7 128 480V445.1C127.6 445.1 127.1 444.1 126.7 444.9L126.5 444.9C102.2 441.1 62.07 430.6 35 418.6C18.85 411.4 11.58 392.5 18.76 376.3C25.94 360.2 44.85 352.9 60.1 360.1C81.9 369.4 116.3 378.5 136.2 381.6C168.2 386.4 194.5 383.6 212.3 376.4C229.2 369.5 236.9 359.5 239.1 347.5C241 336.8 239.6 330.7 237.8 326.9C235.9 322.9 232.2 318.4 224.9 313.5C208.6 302.8 183.8 295.6 151.6 286.9L148.8 286.1C120.4 278.4 85.58 268.9 59.76 251.8C45.65 242.4 32.43 229.7 24.22 212.1C15.89 194.3 14.08 174.3 17.95 153C25.03 114.1 53.05 89.29 85.96 76.73C98.98 71.76 113.1 68.49 128 66.73V32C128 14.33 142.3 0 160 0V0z"/></svg> 1 - <svg aria-hidden="true" role="img" viewBox="0 0 384 512" style="height:1em;width:0.75em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M64 240C46.33 240 32 225.7 32 208C32 190.3 46.33 176 64 176H92.29C121.9 92.11 201.1 32 296 32H320C337.7 32 352 46.33 352 64C352 81.67 337.7 96 320 96H296C238.1 96 187.8 128.4 162.1 176H288C305.7 176 320 190.3 320 208C320 225.7 305.7 240 288 240H144.2C144.1 242.6 144 245.3 144 248V264C144 266.7 144.1 269.4 144.2 272H288C305.7 272 320 286.3 320 304C320 321.7 305.7 336 288 336H162.1C187.8 383.6 238.1 416 296 416H320C337.7 416 352 430.3 352 448C352 465.7 337.7 480 320 480H296C201.1 480 121.9 419.9 92.29 336H64C46.33 336 32 321.7 32 304C32 286.3 46.33 272 64 272H80.15C80.05 269.3 80 266.7 80 264V248C80 245.3 80.05 242.7 80.15 240H64z"/></svg> 50k ⇒ <svg aria-hidden="true" role="img" viewBox="0 0 320 512" style="height:1em;width:0.62em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M160 0C177.7 0 192 14.33 192 32V67.68C193.6 67.89 195.1 68.12 196.7 68.35C207.3 69.93 238.9 75.02 251.9 78.31C268.1 82.65 279.4 100.1 275 117.2C270.7 134.3 253.3 144.7 236.1 140.4C226.8 137.1 198.5 133.3 187.3 131.7C155.2 126.9 127.7 129.3 108.8 136.5C90.52 143.5 82.93 153.4 80.92 164.5C78.98 175.2 80.45 181.3 82.21 185.1C84.1 189.1 87.79 193.6 95.14 198.5C111.4 209.2 136.2 216.4 168.4 225.1L171.2 225.9C199.6 233.6 234.4 243.1 260.2 260.2C274.3 269.6 287.6 282.3 295.8 299.9C304.1 317.7 305.9 337.7 302.1 358.1C295.1 397 268.1 422.4 236.4 435.6C222.8 441.2 207.8 444.8 192 446.6V480C192 497.7 177.7 512 160 512C142.3 512 128 497.7 128 480V445.1C127.6 445.1 127.1 444.1 126.7 444.9L126.5 444.9C102.2 441.1 62.07 430.6 35 418.6C18.85 411.4 11.58 392.5 18.76 376.3C25.94 360.2 44.85 352.9 60.1 360.1C81.9 369.4 116.3 378.5 136.2 381.6C168.2 386.4 194.5 383.6 212.3 376.4C229.2 369.5 236.9 359.5 239.1 347.5C241 336.8 239.6 330.7 237.8 326.9C235.9 322.9 232.2 318.4 224.9 313.5C208.6 302.8 183.8 295.6 151.6 286.9L148.8 286.1C120.4 278.4 85.58 268.9 59.76 251.8C45.65 242.4 32.43 229.7 24.22 212.1C15.89 194.3 14.08 174.3 17.95 153C25.03 114.1 53.05 89.29 85.96 76.73C98.98 71.76 113.1 68.49 128 66.73V32C128 14.33 142.3 0 160 0V0z"/></svg> 50k - amount paid to BMW: <svg aria-hidden="true" role="img" viewBox="0 0 384 512" style="height:1em;width:0.75em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M64 240C46.33 240 32 225.7 32 208C32 190.3 46.33 176 64 176H92.29C121.9 92.11 201.1 32 296 32H320C337.7 32 352 46.33 352 64C352 81.67 337.7 96 320 96H296C238.1 96 187.8 128.4 162.1 176H288C305.7 176 320 190.3 320 208C320 225.7 305.7 240 288 240H144.2C144.1 242.6 144 245.3 144 248V264C144 266.7 144.1 269.4 144.2 272H288C305.7 272 320 286.3 320 304C320 321.7 305.7 336 288 336H162.1C187.8 383.6 238.1 416 296 416H320C337.7 416 352 430.3 352 448C352 465.7 337.7 480 320 480H296C201.1 480 121.9 419.9 92.29 336H64C46.33 336 32 321.7 32 304C32 286.3 46.33 272 64 272H80.15C80.05 269.3 80 266.7 80 264V248C80 245.3 80.05 242.7 80.15 240H64z"/></svg> 50k ] ] ] -- .pull-right[ .content-box-red[.Large[ ## importing a BMW <svg aria-hidden="true" role="img" viewBox="0 0 512 512" style="height:1em;width:1em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M39.61 196.8L74.8 96.29C88.27 57.78 124.6 32 165.4 32H346.6C387.4 32 423.7 57.78 437.2 96.29L472.4 196.8C495.6 206.4 512 229.3 512 256V448C512 465.7 497.7 480 480 480H448C430.3 480 416 465.7 416 448V400H96V448C96 465.7 81.67 480 64 480H32C14.33 480 0 465.7 0 448V256C0 229.3 16.36 206.4 39.61 196.8V196.8zM109.1 192H402.9L376.8 117.4C372.3 104.6 360.2 96 346.6 96H165.4C151.8 96 139.7 104.6 135.2 117.4L109.1 192zM96 256C78.33 256 64 270.3 64 288C64 305.7 78.33 320 96 320C113.7 320 128 305.7 128 288C128 270.3 113.7 256 96 256zM416 320C433.7 320 448 305.7 448 288C448 270.3 433.7 256 416 256C398.3 256 384 270.3 384 288C384 305.7 398.3 320 416 320z"/></svg> - <svg aria-hidden="true" role="img" viewBox="0 0 384 512" style="height:1em;width:0.75em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M64 240C46.33 240 32 225.7 32 208C32 190.3 46.33 176 64 176H92.29C121.9 92.11 201.1 32 296 32H320C337.7 32 352 46.33 352 64C352 81.67 337.7 96 320 96H296C238.1 96 187.8 128.4 162.1 176H288C305.7 176 320 190.3 320 208C320 225.7 305.7 240 288 240H144.2C144.1 242.6 144 245.3 144 248V264C144 266.7 144.1 269.4 144.2 272H288C305.7 272 320 286.3 320 304C320 321.7 305.7 336 288 336H162.1C187.8 383.6 238.1 416 296 416H320C337.7 416 352 430.3 352 448C352 465.7 337.7 480 320 480H296C201.1 480 121.9 419.9 92.29 336H64C46.33 336 32 321.7 32 304C32 286.3 46.33 272 64 272H80.15C80.05 269.3 80 266.7 80 264V248C80 245.3 80.05 242.7 80.15 240H64z"/></svg> .red[2] = <svg aria-hidden="true" role="img" viewBox="0 0 320 512" style="height:1em;width:0.62em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M160 0C177.7 0 192 14.33 192 32V67.68C193.6 67.89 195.1 68.12 196.7 68.35C207.3 69.93 238.9 75.02 251.9 78.31C268.1 82.65 279.4 100.1 275 117.2C270.7 134.3 253.3 144.7 236.1 140.4C226.8 137.1 198.5 133.3 187.3 131.7C155.2 126.9 127.7 129.3 108.8 136.5C90.52 143.5 82.93 153.4 80.92 164.5C78.98 175.2 80.45 181.3 82.21 185.1C84.1 189.1 87.79 193.6 95.14 198.5C111.4 209.2 136.2 216.4 168.4 225.1L171.2 225.9C199.6 233.6 234.4 243.1 260.2 260.2C274.3 269.6 287.6 282.3 295.8 299.9C304.1 317.7 305.9 337.7 302.1 358.1C295.1 397 268.1 422.4 236.4 435.6C222.8 441.2 207.8 444.8 192 446.6V480C192 497.7 177.7 512 160 512C142.3 512 128 497.7 128 480V445.1C127.6 445.1 127.1 444.1 126.7 444.9L126.5 444.9C102.2 441.1 62.07 430.6 35 418.6C18.85 411.4 11.58 392.5 18.76 376.3C25.94 360.2 44.85 352.9 60.1 360.1C81.9 369.4 116.3 378.5 136.2 381.6C168.2 386.4 194.5 383.6 212.3 376.4C229.2 369.5 236.9 359.5 239.1 347.5C241 336.8 239.6 330.7 237.8 326.9C235.9 322.9 232.2 318.4 224.9 313.5C208.6 302.8 183.8 295.6 151.6 286.9L148.8 286.1C120.4 278.4 85.58 268.9 59.76 251.8C45.65 242.4 32.43 229.7 24.22 212.1C15.89 194.3 14.08 174.3 17.95 153C25.03 114.1 53.05 89.29 85.96 76.73C98.98 71.76 113.1 68.49 128 66.73V32C128 14.33 142.3 0 160 0V0z"/></svg> 1 - <svg aria-hidden="true" role="img" viewBox="0 0 384 512" style="height:1em;width:0.75em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M64 240C46.33 240 32 225.7 32 208C32 190.3 46.33 176 64 176H92.29C121.9 92.11 201.1 32 296 32H320C337.7 32 352 46.33 352 64C352 81.67 337.7 96 320 96H296C238.1 96 187.8 128.4 162.1 176H288C305.7 176 320 190.3 320 208C320 225.7 305.7 240 288 240H144.2C144.1 242.6 144 245.3 144 248V264C144 266.7 144.1 269.4 144.2 272H288C305.7 272 320 286.3 320 304C320 321.7 305.7 336 288 336H162.1C187.8 383.6 238.1 416 296 416H320C337.7 416 352 430.3 352 448C352 465.7 337.7 480 320 480H296C201.1 480 121.9 419.9 92.29 336H64C46.33 336 32 321.7 32 304C32 286.3 46.33 272 64 272H80.15C80.05 269.3 80 266.7 80 264V248C80 245.3 80.05 242.7 80.15 240H64z"/></svg> 50k ⇒ <svg aria-hidden="true" role="img" viewBox="0 0 320 512" style="height:1em;width:0.62em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M160 0C177.7 0 192 14.33 192 32V67.68C193.6 67.89 195.1 68.12 196.7 68.35C207.3 69.93 238.9 75.02 251.9 78.31C268.1 82.65 279.4 100.1 275 117.2C270.7 134.3 253.3 144.7 236.1 140.4C226.8 137.1 198.5 133.3 187.3 131.7C155.2 126.9 127.7 129.3 108.8 136.5C90.52 143.5 82.93 153.4 80.92 164.5C78.98 175.2 80.45 181.3 82.21 185.1C84.1 189.1 87.79 193.6 95.14 198.5C111.4 209.2 136.2 216.4 168.4 225.1L171.2 225.9C199.6 233.6 234.4 243.1 260.2 260.2C274.3 269.6 287.6 282.3 295.8 299.9C304.1 317.7 305.9 337.7 302.1 358.1C295.1 397 268.1 422.4 236.4 435.6C222.8 441.2 207.8 444.8 192 446.6V480C192 497.7 177.7 512 160 512C142.3 512 128 497.7 128 480V445.1C127.6 445.1 127.1 444.1 126.7 444.9L126.5 444.9C102.2 441.1 62.07 430.6 35 418.6C18.85 411.4 11.58 392.5 18.76 376.3C25.94 360.2 44.85 352.9 60.1 360.1C81.9 369.4 116.3 378.5 136.2 381.6C168.2 386.4 194.5 383.6 212.3 376.4C229.2 369.5 236.9 359.5 239.1 347.5C241 336.8 239.6 330.7 237.8 326.9C235.9 322.9 232.2 318.4 224.9 313.5C208.6 302.8 183.8 295.6 151.6 286.9L148.8 286.1C120.4 278.4 85.58 268.9 59.76 251.8C45.65 242.4 32.43 229.7 24.22 212.1C15.89 194.3 14.08 174.3 17.95 153C25.03 114.1 53.05 89.29 85.96 76.73C98.98 71.76 113.1 68.49 128 66.73V32C128 14.33 142.3 0 160 0V0z"/></svg> 25k: sales <svg aria-hidden="true" role="img" viewBox="0 0 384 512" style="height:1em;width:0.75em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M318 145.6c-3.812 8.75-12.45 14.41-22 14.41L224 160v272c0 44.13-35.89 80-80 80H32c-17.67 0-32-14.31-32-32s14.33-32 32-32h112C152.8 448 160 440.8 160 432V160L88 159.1c-9.547 0-18.19-5.656-22-14.41S63.92 126.7 70.41 119.7l104-112c9.498-10.23 25.69-10.23 35.19 0l104 112C320.1 126.7 321.8 136.8 318 145.6z"/></svg> - amount paid to BMW: <svg aria-hidden="true" role="img" viewBox="0 0 384 512" style="height:1em;width:0.75em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M64 240C46.33 240 32 225.7 32 208C32 190.3 46.33 176 64 176H92.29C121.9 92.11 201.1 32 296 32H320C337.7 32 352 46.33 352 64C352 81.67 337.7 96 320 96H296C238.1 96 187.8 128.4 162.1 176H288C305.7 176 320 190.3 320 208C320 225.7 305.7 240 288 240H144.2C144.1 242.6 144 245.3 144 248V264C144 266.7 144.1 269.4 144.2 272H288C305.7 272 320 286.3 320 304C320 321.7 305.7 336 288 336H162.1C187.8 383.6 238.1 416 296 416H320C337.7 416 352 430.3 352 448C352 465.7 337.7 480 320 480H296C201.1 480 121.9 419.9 92.29 336H64C46.33 336 32 321.7 32 304C32 286.3 46.33 272 64 272H80.15C80.05 269.3 80 266.7 80 264V248C80 245.3 80.05 242.7 80.15 240H64z"/></svg> .red[50k] - *effect on US automakers?* ] ] ] --- class: inverse, middle background-color: #d64161 background-image: url(https://raw.githubusercontent.com/textvulture/textvulture.github.io/master/images/background_leftEmpty2.jpg) background-size: 140% # .large[So undervaluation .Small[(.pink[weak] currency)] is .yellow[all] good?] -- ## - serious welfare/distributional effects -- ## - external consequences (cf. 'currency manipulator') -- ## - .orange[interest groups] would lobby for undervaluation (.Green[sometimes]) -- # .pink[Broz and Werfel (2014)]; .bluey[Steinberg and Shih (2012)] --- class: inverse, center, middle background-color: #37145A background-image: url(https://raw.githubusercontent.com/textvulture/textvulture.github.io/master/images/forestBackground.jpg) background-size: 100% # .huge[Let's talk about Debt] ## And how it is related to development --- class: inverse, center, middle background-color: red # .Huge[Is Debt = Doom <svg aria-hidden="true" role="img" viewBox="0 0 512 512" style="height:1em;width:1em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M416 400V464C416 490.5 394.5 512 368 512H320V464C320 455.2 312.8 448 304 448C295.2 448 288 455.2 288 464V512H224V464C224 455.2 216.8 448 208 448C199.2 448 192 455.2 192 464V512H144C117.5 512 96 490.5 96 464V400C96 399.6 96 399.3 96.01 398.9C37.48 357.8 0 294.7 0 224C0 100.3 114.6 0 256 0C397.4 0 512 100.3 512 224C512 294.7 474.5 357.8 415.1 398.9C415.1 399.3 416 399.6 416 400V400zM160 192C124.7 192 96 220.7 96 256C96 291.3 124.7 320 160 320C195.3 320 224 291.3 224 256C224 220.7 195.3 192 160 192zM352 320C387.3 320 416 291.3 416 256C416 220.7 387.3 192 352 192C316.7 192 288 220.7 288 256C288 291.3 316.7 320 352 320z"/></svg>?] -- # B/C, foreign debt = losing independence? -- # OMG, I remember we owe China *a lot* ! --- # A quick .Yellow[cut-away]: The Story of American Debt -- .pull-left[ .center[ <img src="https://cdn.howmuch.net/articles/Foreign-Curency-Draft9-4ddb.png" width="95%" /> ] ] -- .pull-right[ .center[ <img src="https://wolfstreet.com/wp-content/uploads/2018/10/US-Treasury-holdings-TIC-pie-2018-08.png" width="95%" /> ] ] --- # Aren't people still saying the US <svg aria-hidden="true" role="img" viewBox="0 0 320 512" style="height:1em;width:0.62em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:green;overflow:visible;position:relative;"><path d="M160 0C177.7 0 192 14.33 192 32V67.68C193.6 67.89 195.1 68.12 196.7 68.35C207.3 69.93 238.9 75.02 251.9 78.31C268.1 82.65 279.4 100.1 275 117.2C270.7 134.3 253.3 144.7 236.1 140.4C226.8 137.1 198.5 133.3 187.3 131.7C155.2 126.9 127.7 129.3 108.8 136.5C90.52 143.5 82.93 153.4 80.92 164.5C78.98 175.2 80.45 181.3 82.21 185.1C84.1 189.1 87.79 193.6 95.14 198.5C111.4 209.2 136.2 216.4 168.4 225.1L171.2 225.9C199.6 233.6 234.4 243.1 260.2 260.2C274.3 269.6 287.6 282.3 295.8 299.9C304.1 317.7 305.9 337.7 302.1 358.1C295.1 397 268.1 422.4 236.4 435.6C222.8 441.2 207.8 444.8 192 446.6V480C192 497.7 177.7 512 160 512C142.3 512 128 497.7 128 480V445.1C127.6 445.1 127.1 444.1 126.7 444.9L126.5 444.9C102.2 441.1 62.07 430.6 35 418.6C18.85 411.4 11.58 392.5 18.76 376.3C25.94 360.2 44.85 352.9 60.1 360.1C81.9 369.4 116.3 378.5 136.2 381.6C168.2 386.4 194.5 383.6 212.3 376.4C229.2 369.5 236.9 359.5 239.1 347.5C241 336.8 239.6 330.7 237.8 326.9C235.9 322.9 232.2 318.4 224.9 313.5C208.6 302.8 183.8 295.6 151.6 286.9L148.8 286.1C120.4 278.4 85.58 268.9 59.76 251.8C45.65 242.4 32.43 229.7 24.22 212.1C15.89 194.3 14.08 174.3 17.95 153C25.03 114.1 53.05 89.29 85.96 76.73C98.98 71.76 113.1 68.49 128 66.73V32C128 14.33 142.3 0 160 0V0z"/></svg> dominance is ending? -- .pull-left[ <img src="images/dollar-skeptic.JPG" width="1032" /> ] -- .pull-right[ <img src="https://pup-assets.imgix.net/onix/images/9780691168524.jpg" width="60%" style="display: block; margin: auto;" /> ] --- class: inverse background-color: #37145A # .Large[**But aren't .red[most] debts still bad?**] .pull-left[ ## - No: In particular, .red[sovereign debt]: sources of .green[development fund] ## - .red[Too much] sovereign debt spells trouble though (i.e., 'original sin') ## - the more you borrow, the harder it becomes to borrow (.yellow[credit rating]) ] -- .pull-right[ # Example: Moody's .center[ <!-- --> ] ] --- class: inverse, middle background-image: url(https://www.glabarre.com/item_images/5k%20us%20bond.jpg) background-size: contain background-position: right background-color: black -- # .huge[**How does .Green[bond] work?**] -- # .Blue[**.green[Domestic] vs. Foreign currency denomination?**] -- # .orange[**Ballard-Rosa, Mosely, and Wellhausen (2021)**] --- class: inverse, left, bottom background-image: url(https://miro.medium.com/max/1400/1*Z-htNgpOFMVwdQHWLMrZ2Q.gif) background-size: contain # .Large[Sometimes you just cannot repay the debt.] -- # You need a bailout: how does that work? -- # .yellow[.Large[Schneider and Tobin (2020)]] --- class: inverse, right background-image: url(https://content3.jdmagicbox.com/comp/hyderabad/f6/040pxx40.xx40.140124131631.x9f6/catalogue/star-global-currency-exchange-pvt-ltd-jubilee-hills-hyderabad-foreign-exchange-agents-49enny0.jpg?clr=3f273f) background-size: contain background-position: left background-color: black #.huge[**Remmitances**] -- ## <svg aria-hidden="true" role="img" viewBox="0 0 640 512" style="height:1em;width:1.25em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:yellow;overflow:visible;position:relative;"><path d="M554.9 154.5c-17.62-35.25-68.12-35.38-85.87 0c-87 174.3-84.1 165.9-84.1 181.5c0 44.13 57.25 80 128 80s127.1-35.88 127.1-80C639.1 319.9 641.4 327.3 554.9 154.5zM439.1 320l71.96-144l72.17 144H439.1zM256 336c0-16.12 1.375-8.75-85.12-181.5c-17.62-35.25-68.12-35.38-85.87 0c-87 174.3-84.1 165.9-84.1 181.5c0 44.13 57.25 80 127.1 80S256 380.1 256 336zM127.9 176L200.1 320H55.96L127.9 176zM495.1 448h-143.1V153.3C375.5 143 393.1 121.8 398.4 96h113.6c17.67 0 31.1-14.33 31.1-32s-14.33-32-31.1-32h-128.4c-14.62-19.38-37.5-32-63.62-32S270.1 12.62 256.4 32H128C110.3 32 96 46.33 96 64S110.3 96 127.1 96h113.6c5.25 25.75 22.87 47 46.37 57.25V448H144c-26.51 0-48.01 21.49-48.01 48c0 8.836 7.165 16 16 16h416c8.836 0 16-7.164 16-16C544 469.5 522.5 448 495.1 448z"/></svg> Debatable if it helps development -- ### financing vs. rent-seeking -- ## <svg aria-hidden="true" role="img" viewBox="0 0 576 512" style="height:1em;width:1.12em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:red;overflow:visible;position:relative;"><path d="M480 80C480 53.49 458.5 32 432 32h-288C117.5 32 96 53.49 96 80V384h384V80zM378.9 166.8l-88 112c-4.031 5.156-10 8.438-16.53 9.062C273.6 287.1 272.7 287.1 271.1 287.1c-5.719 0-11.21-2.019-15.58-5.769l-56-48C190.3 225.6 189.2 210.4 197.8 200.4c8.656-10.06 23.81-11.19 33.84-2.594l36.97 31.69l72.53-92.28c8.188-10.41 23.31-12.22 33.69-4.062C385.3 141.3 387.1 156.4 378.9 166.8zM528 288H512v112c0 8.836-7.164 16-16 16h-416C71.16 416 64 408.8 64 400V288H48C21.49 288 0 309.5 0 336v96C0 458.5 21.49 480 48 480h480c26.51 0 48-21.49 48-48v-96C576 309.5 554.5 288 528 288z"/></svg> But is there any other effect? -- ### Tertytchnaya et al. (2018)