Table: Vietnam's International Transactions, 2007 (Unit: millions U.S. dollars) A. Current account balance Exports of goods...

 

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Table: Vietnam's International Transactions, 2007 (Unit: millions U.S. dollars) A. Current account balance Exports of goods Imports of goods Trade balance Exports of services Imports of services Balance of trade in services Receipts of investment incomes Payment of investment incomes Net income transfers B. Capital account Source: IMF Staff Report 48561 -58999 6030 -6785 1166 -3356 6430 0 C. Financial accounts Net FDI inflows Outflows of FDI Inflows of FDI Portfolio Investment Derivatives Other investment Changes in official reserve assets D. Errors and omissions E. Balance of Payments 6516 -184 6700 6243 0 4971 -565 c. b. Based on the economic situation in 2007, discuss the disequilibrium (surplus or deficits) in the current account balance, financial account balance, and the balance of payment. It has been argued that large capital inflows can do both goods and harms to the recipient country. While capital inflows contribute to domestic investment and overall economic growth, large and volatile capital inflows can lead to macroeconomic instability. Discuss this argument, and use Vietnam's official statistics in 2007 (BOP, money supply, inflation, etc) to support your discussion. Table: Vietnam's International Transactions, 2007 (Unit: millions U.S. dollars) A. Current account balance Exports of goods Imports of goods Trade balance Exports of services Imports of services Balance of trade in services Receipts of investment incomes Payment of investment incomes Net income transfers B. Capital account Source: IMF Staff Report 48561 -58999 6030 -6785 1166 -3356 6430 0 C. Financial accounts Net FDI inflows Outflows of FDI Inflows of FDI Portfolio Investment Derivatives Other investment Changes in official reserve assets D. Errors and omissions E. Balance of Payments 6516 -184 6700 6243 0 4971 -565 c. b. Based on the economic situation in 2007, discuss the disequilibrium (surplus or deficits) in the current account balance, financial account balance, and the balance of payment. It has been argued that large capital inflows can do both goods and harms to the recipient country. While capital inflows contribute to domestic investment and overall economic growth, large and volatile capital inflows can lead to macroeconomic instability. Discuss this argument, and use Vietnam's official statistics in 2007 (BOP, money supply, inflation, etc) to support your discussion.