BALANCE OF PAYMENT ACCOUNTS

Аннотация

This article provides basic concepts about the balance of payment accounts, as well as information ondefinition ofitstypes and itsprinciples, and proposals onsubaccounts. Key words:current account, merchandise trade account, goods and services account, financial account. The balance of payments accounts is a record of all international transactions that are undertaken between residents of one country and residents of other countries during the year. The accounts are divided into several subaccounts, the most important being the current account and the financial account. The current account is often further subdivided into the merchandise trade account and thegood and services account. These are each briefly defined below. The current account (CA) balance is defined as CA = EXG,S,IPR,UT − IMG,S,IPR,UTwhere the G,S,IPR,UT superscript is meant to include exports and imports of goods (G), services (S), income payments and receipts (IPR), and unilateral transfers (UT). IfCA > 0, then exports of goods and services exceed imports and the country has a current account surplus. If CA 0, the country would havea (merchandise) tradesurplus. If GB 0, the country would have a goods and services (G&S) surplus. If GB< 0, the country has a G&S deficit. Notethat sometimes people will refer tothe difference EXG&S −IMG&S as net exports. Often when this term is used the person is referencing the goods and services balance. Here it is important to point out that when you hear a reference to a country’s trade balance, it could mean the merchandise trade balance, or it could mean the goods and services balance, or it could even mean the current account balance. Occasionally, one will hear trade deficit figures reported in the U.S. press followed by a comment that the deficit figures refer to the “broad” measure of trade between countries. In this case, the numbers reported refer to the current account deficit rather than the merchandise trade deficit. This usage is developing for a couple of reasons. First of all, at one time, around thirty years ago or more, there was very little international trade in services. At that time, it was common to report the merchandise trade balance since that accounted for most of the international trade. In the past decade or so, service trade has been growing much more rapidly than goods trade and it