Subsequently we will explain the positioning of Advanced Planning and Optimization in relation to other IT solutions e. We will conclude by providing some recommendations. This article is based on best-practices applied at various midsize and international companies on multiple continents. Industry trends The current environment for the transportation industry is recognized as challenging, given low margins, pressure on volumes and increasing fuel prices see .
Since the trade balance exports minus imports is generally the biggest determinant of the current account surplus or deficit, the current account balance often displays a cyclical trend. During a strong economic expansion, import volumes typically surge; if exports are unable to grow at the same rate, the current account deficit will widen.
Conversely, during a recession, the current account deficit will shrink if imports decline and exports increase to stronger economies. The currency exchange rate exerts a significant influence on the trade balance, and by extension, on the current account.
An overvalued currency makes imports cheaper and exports less competitive, thereby widening the current account deficit or narrowing the surplus. An undervalued currency, on the other hand, boosts exports and makes imports more expensive, thus increasing the current account surplus or narrowing the deficit.
Nations with chronic current account deficits often come under increased investor scrutiny during periods of heightened uncertainty. The currencies of such nations often come under speculative attack Is globalization widening or narrowing the such times.
This creates a vicious circle where precious foreign exchange reserves are depleted to support the domestic currency, and this forex reserve depletion — combined with a deteriorating trade balance — puts further pressure on the currency.
Embattled nations are often forced to take stringent measures to support the currency, such as raising interest rates and curbing currency outflows. Action to reduce a substantial current account deficit usually involves increasing exports goods going out of a country and entering abroad countries or decreasing imports goods coming from a foreign country into a country.
How have these developments affected people's incomes and the gap between the rich and the poor within countries? A chapter of the IMF's October World Economic Outlook, entitled "Globalization and Inequality," offers some tentative answers. Jan 22, · Globalization should narrow the gap, but it is a secondary effect and by itself cannot overcome countries with domestic issues with corruption, lack of rule of law, bad economic policies, etc. As an example, look at South Korea, where access to a global market has dramatically grown their economy. narrowing impact of trade and evidence of a widening impact of FDI net inflows on the high-skill occupational gender gap in poorer countries show that globalization may not lower and in some instances may increase occupational gender wage gaps.
Firstly, this is generally accomplished directly through import restrictions, quotas, or duties though these may indirectly limit exports as wellor by promoting exports through subsidies, custom duty exemptions etc. Influencing the exchange rate to make exports cheaper for foreign buyers will indirectly increase the balance of payments.
Also, currency warsa phenomenon evident in post recessionary markets is a protectionist policy, whereby countries devalue their currencies to ensure export competitiveness.
Secondly, adjusting government spending to favor domestic suppliers is also effective. Less obvious methods to reduce a current account deficit include measures that increase domestic savings or reduced domestic borrowingincluding a reduction in borrowing by the national government.
A current account deficit is not always a problem. The Pitchford thesis states that a current account deficit does not matter if it is driven by the private sector.
It is also known as the "consenting adults" view of the current account, as it holds that deficits are not a problem if they result from private sector agents engaging in mutually beneficial trade.
A current account deficit creates an obligation of repayments of foreign capital, and that capital consists of many individual transactions. Pitchford asserts that since each of these transactions were individually considered financially sound when they were made, their aggregate effect the current account deficit is also sound.
A deficit implies we import more goods and services than we export. To be more precise, the current account equals: Trade in goods visible balance Trade in services Invisible balance e. Interrelationships in the balance of payments[ edit ] Main article: Balance of payments The balance of payments BOP is the place where countries record their monetary transactions with the rest of the world.
Transactions are either marked as a credit or a debit. Within the BOP there are three separate categories under which different transactions are categorized: In the current account, goods, services, income and current transfers are recorded.
In the capital account, physical assets such as a building or a factory are recorded.
And in the financial account, assets pertaining to international monetary flows of, for example, business or portfolio investments are noted. Absent changes in official reserves, the current account is the mirror image of the sum of the capital and financial accounts.
One might then ask: Is the current account driven by the capital and financial accounts or is it vice versa? The traditional response is that the current account is the main causal factor, with capital and financial accounts simply reflecting financing of a deficit or investment of funds arising as a result of a surplus.
However, more recently some observers have suggested that the opposite causal relationship may be important in some cases. In particular, it has controversially been suggested that the United States current account deficit is driven by the desire of international investors to acquire US assets see Ben Bernanke William Poole links below.
However, the main viewpoint undoubtedly remains that the causative factor is the current account and that the positive financial account reflects the need to finance the country's current account deficit.The Stubborn Mule (), by Hermann G.
Simon. When political commentators aren’t talking about Donald Trump, they are often talking about how the Democratic Party has “moved to the left.”. Globalization is a large reason for a large gap between rich and poor countries due to the rich countries taking advantage of the poorer countries and often globalization has made natural progression and industrialisation just appear which is not.
There are several theoretical reasons why globalization will have a narrowing as well as widening effect on the gender wage gap, but little is known about the actual impact, except for a . David, yep.
They’re making all the same mistakes that lost Clinton the election, and the obsessive focus on the identity politics of race and gender as a way to avoid talking about economic issues and the widening class divisions in American society is one of the whoppers.
November 12, October Letter - Dear Fellow Aero Book Club Affiliates, If civilization is destroyed – as of now, I’d give this 60% odds – space alien museum curators, or whoever, will one day need to know what our beloved industry looked like.
The Levy Economics Institute of Bard College is a non-profit, nonpartisan, public policy think tank.