Cover
title | : | The Global Economy and International Financing |
author | : | Beenhakker, Henri L. |
publisher | : | Greenwood Publishing Group |
isbn10 | asin | : | 1567204015 |
print isbn13 | : | 9781567204018 |
ebook isbn13 | : | 9780585383965 |
language | : | English |
subject | International finance, Foreign exchange, International trade, International business enterprises--Management. |
publication date | : | 2001 |
lcc | : | HG3881.B42 2001eb |
ddc | : | 658.15/99 |
subject | : | International finance, Foreign exchange, International trade, International business enterprises--Management. |
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The Global Economy and International Financing
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The Global Economy and International Financing
HENRI L. BEENHAKKER
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Library of Congress Cataloging-in-Publication Data
Beenhakker, Henri L.
The global economy and international financing / Henri L. Beenhakker.
p. cm.
Includes bibliographical references and index.
ISBN 1567204015 (alk. paper)
1. International finance. 2. Foreign exchange. 3. International trade. 4. International
business enterprisesManagement. I. Title.
HG3881.B42 2001
658.15'99dc21 00037265
British Library Cataloguing in Publication Data is available.
Copyright 2001 by Henri L. Beenhakker
All rights reserved. No portion of this book may be reproduced, by any process or technique, without the express written consent of the publisher.
Library of Congress Catalog Card Number: 00037265
ISBN: 1567204015
First published in 2001
Quorum Books, 88 Post Road West, Westport, CT 06881
An imprint of Greenwood Publishing Group, Inc.
www.quorumbooks.com
Printed in the United States of America
The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.481984).
10 9 8 7 6 5 4 3 2 1
Copyright Acknowledgment
Appendixes 2 and 6 are reprinted from Henri L. Beenhakker, Risk Management in Project Finance and Implementation (Westport, CT: Quorum Books, 1997). Copyright 1997 by Henri L. Beenhakker. Reproduced with permission of Greenwood Publishing Group, Inc., Westport, CT.
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To
Caroline, Barbara, Mark and Britta
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Contents
Figures and Tables | ix |
Preface | xiii |
1. | Foreign Exchange Markets | 1 |
2. | International Trade | 27 |
3. | International Capital Flows | 47 |
4. | Balance-of-Payments Policy | 73 |
5. | Determinants of Interest Rates | 97 |
6. | Financial Crises: Insights from East Asia | 121 |
7. | Managing Foreign Exchange Exposure | 149 |
8. | Financing from a Global Perspective | 183 |
Appendixes |
1. | Water Supply Project (Case Study) | 209 |
2. | Interest Tables for Discrete Compounding | 219 |
3. | Arcadian Telecom (Case Study) | 229 |
4. | Credit Rating Agencies | 237 |
5. | Cash Flow Analysis (Case Study) | 241 |
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6. | Probability of a Value of Z = [PE(P)]/ Being Smaller than (or Equal to) the Values Tabulated in the Margins | 251 |
7. | Development of a New Subsidiary (Case Study) | 253 |
8. | Second-Generation Currency Risk Management Products | 263 |
Index | 269 |
Page ix
Figures and Tables
FIGURES |
1.1 | Purchasing Power Parity | 14 |
1.2 | Interest Rate Parity | 16 |
1.3 | Interest Rate Parity and Equilibrium | 18 |
1.4 | Profit and Loss for the Buyer and Writer of a Call Option on German Marks with a Premium of $0.005/DM | 22 |
1.5 | Profit and Loss for the Buyer and Writer of a Put Option on German Marks with a Premium of $0.005/DM | 24 |
4.1 | Policy Options to Correct a BOP Deficit | 81 |
4.2 | International Official Liquidity and External and Internal Policy Measures | 84 |
4.3 | Feasible Policy Space for Resolving BOP Deficits | 85 |
5.1 | Marginal Efficiency of Investment (MEI) Curve | 98 |
5.2 | MEI and Savings Curves | 99 |
5.3 | Loanable Funds Approach | 100 |
5.4 | An Increase in the Money Supply | 101 |
5.5 | Increased Government Borrowing | 102 |
5.6 | Expenditures = Production = Income | 105 |
5.7 | Total Expenditures = C + I + G | 107 |
5.8 | An Increase in Investment | 108 |
5.9 | Flat versus Steep MEI | 110 |
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5.10 | Shift in MEI | 111 |
5.11 | Speculative Balances versus Interest Rates | 112 |
5.12 | Demand and Supply for Money | 115 |
5.13 | Four Components of the Neo-Keynesian Model | 116 |
7.1 | Impact of Hedging on a Companys Expected Cash Flows | 150 |
7.2 | Combining the MCC Schedule and the IOS to Determine the Optimal Capital Budget | 175 |
8.1 | Example of a Yield Curve | 192 |
TABLES |
1.1 | Spot and Forward Quotations for the German Mark (DM) | 11 |
3.1 | Illustrative Differences in Net Worth, Capital Surplus, Retained Earnings and EPS Caused by Accounting Methods | 61 |
3.2 | Illustration of Advance Commitment for Mr. Smith, Mortgage Banker | 65 |
3.3 | Illustration of Hedging Strategy for Ms. Jones, Mortgage Banker | 67 |
4.1 | Consolidated Balance of Payments | 75 |
5.1 | The MPC, the Multiplier and the MPS | 109 |
5.2 | GNP Multiplier | 109 |
5.3 | Market-Value Balance Sheets of Company |
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