International finance covers some of the most complex but also important topics in economics. How are exchange rates determined? When if ever are ongoing trade deficits harmful? Are fixed or floating exchange rates better? What are the roots of the euro crisis and what resolution can we expect? Does…
Marginal Revolution University
When an American firm purchases Chinese goods, the Chinese economy can do one of three things with the dollars: spend them on US goods, invest in the US, or hold them as reserves. This simple but important accounting identity is called the balance of...