Globalization
Last week, we discussed a few of the stories hidden in the Balance of Payments. The discussion started with a recognition that the BOP had two sections, one called the current account and the other referred to as the capital and financial accounts. In doing so, it also started examining the first part of the current account, namely the Merchandise Trade and one aspect of the primary income account, the factor services.
Within the Merchandise Trade section, it was observed that various business strategies could be employed to effect cross-border trade.
For example, there was the issue of merchanting which is the export of goods from one country to another