What is International Finance?
International macroeconomics is another term used to describe the study of monetary interactions between countries. In addition to the individual countries involved, there are players, such as the International Finance Corporation (IFC). It is responsible for the marriage of private investment with businesses in developing countries. Since 1956, IFC has transformed $2.6 billion of capital to over $285 billion in financing for countries in need of an economic boost.
Another entity is the National Bureau of Economic Research (NBER) is a non-profit, non-partisan source of economic data for economists, academics, and business professionals. The organization attests that over 1,400 college professors of business and economics in North America perform research for NBER.
Countries worthy of study
Statista, based in Hamburg, Germany, compiles and presents statistics on more than 80,000 topics from 22,500 sources. The data is available in German, French, Spanish, and English. The company also has offices in London, New York, Paris, Singapore, and Amsterdam, with about 500 of the 700 employees working at the German headquarters.
Another source for data is Investopedia who reports on foreign currency reserves from the International Monetary Fund (IMF). Since 1944, the IMF has loaned over $1 trillion (USD) to member countries that now stands at 189.
The above sources have data on the international reserves and foreign currency liquidity of several countries. A country accumulates foreign currency through its exports, which results in the payment in that importing country’s currency. The transaction is typically in U.S. dollars. Those countries with the highest reserves may warrant further study as they play a significant role in the world’s economy.
At the top of the list as of April 2020, per the IMF, is Mainland China with $3.111 trillion in reserves and liquidity, excluding gold (U.S. dollars). In second place is Japan, with $1.332 trillion, almost a third of China. Perhaps surprisingly, it is Switzerland in the third spot with $830.748 billion in liquidity. The United States, with a figure of $121.197 billion, for comparison, is behind numerous countries, including Saudi Arabia, Hong Kong, South Korea, Brazil, Singapore, Germany, Thailand, the United Kingdom, and Mexico.
One country stands out due to the prolific news coverage of trade relations – and that is China. International business and finance majors should start with the economy that the U.S. imported $33.281 billion from in January 2020. For the same month, exports were $7.215 billion, resulting in a $26 billion negative balance!
Number two on the list above is Japan that pales in contrast to the trade with China. In January 202, the U.S. imported $10.439 billion worth of goods and exported $5.455 billion in services and products to Japan. Again, there is a negative balance of almost five billion dollars. The country is our 4th largest trading partner, with a total of $218.3 billion in 2019. However, the current Trump administration had a $69 billion trade deficit with Japan the same year.
College Programs
At the master’s degree level, international business and finance curricula cover a range of topics, such as Global Supply Chains, Risk Management, E-commerce, and Data Analysis. Northeastern University’s D’Amore-McKim School of Business offers a Master’s in International Business, whose study plan explores foreign exchange markets, foreign risk management, the IMF, international trade issues, and more. No doubt, the coursework incorporates the financial and trade details as pertinent examples on the international scene.
Individuals contemplating a career in the field should research programs in finance or business as these have a better chance of courses dealing with international trade. The coursework in the Bachelor of Science at Regis University teaches a range of subjects, for example, a class in international finance, microeconomics, accounting, financial risk, and more.
Western Kentucky University’s (WKU) B.S. in International Business examines international management, financial management, law, and statistics. This program is geared more towards management than finance.
Online students may be interested in the 120-credit B.S. in International Business at the University of Minnesota. Their curriculum incorporates more finance classes than WKU. The list includes macroeconomics, international business law, global marketing, international finance, culture, and others.
In summary, anyone interested in global economics will benefit from the self-study of the economic history of other countries. Historical data is in a constant state of flux, much like the stock market. Global policies and affairs affect countries in different ways. Also, examining history may explain how China became the world’s fastest-growing economy since the 1980s. The Mainland suffered through revolution, socialism, Maoism, and sub-standard living conditions. The economic reform of 1978 was the catalyst for the rise in its finances. It sounds like the optimum place to start one’s historical research.
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