Choose a country and analyze its balance of payments for the past 10 years. Good sources of data include official bulletins of the statistical authority of a country or its central banks; International Financial Statistics, which is a publication of the IMF (www.imf.org), and the Main Economic Indicators, which is a publication of the Organization for Economic Co-operation and Development (www.oecd.org).

a. Examine how trade in goods and services has evolved over time. Is the country becoming more or less competitive in world markets?

b. Consider the relationship between the country’s net foreign asset position and its international investment income account.

c. If the country has run a current account deficit, what capital inflows have financed the deficit? If the country has run a current account surplus, how have the capital outflows been invested?