Analysis of Barriers to Invisible Trade
The attempt to classify invisibles into particular categories, as was done in the previous chapter, follows closely the definitions of the IMF and those given in the official British balance-of-payments statistics. From an economic point of view, such a classification, and the resulting concept of an “invisibles” section in the balance-of-payments account, is not particularly useful. For it fails to distinguish between (i) the flow of currently-produced services, (ii) the movement of capital which is the source of those services, (iii) the earnings of direct foreign investment concerned with the production of goods and (iv) interest payments on short-term capital movements.
KeywordsDirect Foreign Investment Foreign Company Portfolio Investment Foreign Bank Operating Subsidy
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