Abstract
Globalization has brought increased attention to the balance of payments situation from a variety of countries. The traditional method of measuring balance of payments may not be applicable in certain situations. This paper draws on the idea of economic resilience, uses the transmission mechanism of balance of payments imbalance, and establishes a system of balance of payments imbalance resilience to provide a complement to the traditional measure. In this article, we establish a system of balance of payments resilience and ensure its reasonableness and effectiveness. The main conclusions are as follows: (1) balance of payments resilience score can be used as a reference and early warning indicator of a country’s balance of payments situation and improves the measurement of balance of payments. (2) Improving the country’s unemployment rate and boosting adjusted net savings will significantly upgrade the balance of payments situation. Improving foreign capital adequacy and foreign exchange market conditions is more beneficial for improving the country’s rank of resilience score.
Highlights
Politics, economy, and culture of countries around the globe are becoming increasingly intertwined through globalization and international trade
(2) We describe the idea of economic resilience. is article uses this to establish an index system. (3) e rationale for the selection of the balance of payments (BOP) imbalance resilience indicators is introduced using the foundation for the selection of the indicators, which is the core portion of the literature review
Using a fixed value as a warning line for imbalances is internationally common, but it has some disadvantages. us, this paper draws on the idea of economic resilience in the macroeconomic field and summarizes two requirements for the selection of imbalance resilience indicators, on the basis of which the transmission path of BOP imbalance is derived to provide reference for the establishment of the resilience system
Summary
Economy, and culture of countries around the globe are becoming increasingly intertwined through globalization and international trade. Us, we can conclude that the BOP affects the foreign exchange rate, foreign trade, domestic economic growth, macroeconomic stability, and other macroeconomic indicators. Kong et al [20] conducted research on the relationship between the foreign openness and the quality of economic growth in a changing exchange rate environment from 1994 to 2018 and established a system for measuring the quality of economic growth, the indicators of which could be used to select indicators to construct resilience of BOP. Us, this paper draws on the idea of economic resilience in the macroeconomic field and summarizes two requirements for the selection of imbalance resilience indicators, on the basis of which the transmission path of BOP imbalance is derived to provide reference for the establishment of the resilience system Using a fixed value as a warning line for imbalances is internationally common, but it has some disadvantages. us, this paper draws on the idea of economic resilience in the macroeconomic field and summarizes two requirements for the selection of imbalance resilience indicators, on the basis of which the transmission path of BOP imbalance is derived to provide reference for the establishment of the resilience system
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