Comments:
1. What the observation seems to mean is that, when a large number of citizens of a country work in foreign countries, they send remittances to their country for maintenance of their families, and for investment.
2. The money which comes into the country in this way goes by the name of 'invisible exports' (there are other similar items also).
3. Depending on their magnitude, such inward remittances:
-either create current account surplus,
-or reduce current account deficit. .
HI I am postgraduate student in Finance. I study International Money and Finance. There is something that i do not understand and i need some help. In PPT that our professor gave us, say
'' A nation having a goods market deficit (imports greater than exports) with foreign residents necessarily has a financial market surplus with foreigners, and conversely''.
What I do not understand is why this nation will have a financial market surplus. I thought that when a country has a deficit, in its goods market, this means that it pays more money to foreigners than receives from exports.
Thanks
