Capital and Financial Account in BoP essay (1 Viewer)

[Raymondo]

How do you integrate the KAFA into an essay?
Apart from just stating simply: An inflow in the financial account such as foreign direct investment leads to an outflow in the Net Primary Income Account due to the dividends being paid back.

Is it worth dedicating a paragraph to a trend or factor to it?
Because in Dixon and Riley's textbook there's literally no information on it, and there's hardly any reference to it

If so where do I get the info/trends on the CAFA?

 

[Il Capitano3]

i guess you could talk about trends in it fairly easily, as by learning trends for the CAD (which Id assume would be the main focus of your essay, depending on the question of course. most BOP questions are on the CAD) you are essentially learning trends for the KFA, since CAD+KFA=0. If you wanted to you could mention things like direct and portfolio investment, and trends in that, and then link that to the outflow on the net primary income. But yeah in terms of finding trends, rileys textbook has a couple of tables with trends for each part of the KFA, as well as the KFA itself (which can easily be interpreted from looking at trends in the CAD)
In saying all this, I think it is much more important that you speak about the CAD, as well as its causes and effects in a balance of payments essay, however it might be worth mentioning the KFA, but spend more time on the CAD