A Sterling Performance
Neil Wilson

Hi Neil

I follow your writings with great interest, in particular your blog posts regarding the dynamics of floating exchange rates and international trade.

I have a feel for how these dynamics operate via the banking system and how they are accounted for in the national current and financial account, but I would like form a fuller understanding.

And here’s my question: would you be willing to write a post detailing a numerical balance sheet analysis of purchasing a foreign good, say a car? I would like to see how such a purchase impacts both the importer and exporter’s banks’ balance sheets and central bank reserve holdings at respective central banks, plus the impact on the respective national accounts in terms of the current and financial accounts. Or, can you point me to material that gives such an exposition?

Some months ago, I asked Eric Tymoigne to include such an analysis in his Money and Banking lecture series, but his reply was to ask you!

Kind regards

Richard Tye

Richard Tye@widespreadhaze

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