balance of payment
BALANCE OF PAYMENTS
Contents
1 Composition of the balance of payments sheet
1.1 Variations in the use of term "balance of payments"
1.2 The IMF definition
2 Imbalances
2.1 Causes of BOP imbalances
2.2 Reserve asset
2.3 Balance of payments crisis
3 Balancing mechanisms
3.1 Rebalancing by changing the exchange rate
3.2 Rebalancing by adjusting internal prices and demand
3.3 Rules based rebalancing mechanisms
4 History of balance of payments issues
4.1 Pre-1820: mercantilism
4.2 1820–1914: free trade
4.3 1914–1945: deglobalisation
4.4 1945–1971: Bretton Woods
4.5 1971–2009: transition, Washington Consensus, Bretton Woods II
4.6 2009 and later: post Washington Consensus
4.6.1 Competitive devaluation after 2009
5 See also
6 Notes and citations
7 Further reading
8 External links
8.1 Data
8.2 Analysis
BALANCE OF PAYMENTS
Balance of payments (BoP) accounts are an accounting record of all monetary transactions between a country and the rest of the world. These transactions include payments for the country's exports and imports of goods, services, financial capital, and financial transfers. The BOP accounts summarize international transactions for a specific period, usually a year, and are prepared in a single currency, typically the domestic currency for the country concerned. Sources of funds for a nation, such as exports or the receipts of loans and investments, are recorded as positive or surplus items. Uses of funds, such as for imports or to invest in foreign countries, are recorded as negative or deficit items.
When all components of the BOP accounts are included they must sum to zero with no overall surplus or deficit. For example, if a country is importing more than it exports, its trade balance will be in deficit, but the shortfall will have to be counterbalanced in other ways – such as by funds earned from its foreign investments, by running down central bank reserves or by receiving loans from other countries.
While the
Contents
1 Composition of the balance of payments sheet
1.1 Variations in the use of term "balance of payments"
1.2 The IMF definition
2 Imbalances
2.1 Causes of BOP imbalances
2.2 Reserve asset
2.3 Balance of payments crisis
3 Balancing mechanisms
3.1 Rebalancing by changing the exchange rate
3.2 Rebalancing by adjusting internal prices and demand
3.3 Rules based rebalancing mechanisms
4 History of balance of payments issues
4.1 Pre-1820: mercantilism
4.2 1820–1914: free trade
4.3 1914–1945: deglobalisation
4.4 1945–1971: Bretton Woods
4.5 1971–2009: transition, Washington Consensus, Bretton Woods II
4.6 2009 and later: post Washington Consensus
4.6.1 Competitive devaluation after 2009
5 See also
6 Notes and citations
7 Further reading
8 External links
8.1 Data
8.2 Analysis
BALANCE OF PAYMENTS
Balance of payments (BoP) accounts are an accounting record of all monetary transactions between a country and the rest of the world. These transactions include payments for the country's exports and imports of goods, services, financial capital, and financial transfers. The BOP accounts summarize international transactions for a specific period, usually a year, and are prepared in a single currency, typically the domestic currency for the country concerned. Sources of funds for a nation, such as exports or the receipts of loans and investments, are recorded as positive or surplus items. Uses of funds, such as for imports or to invest in foreign countries, are recorded as negative or deficit items.
When all components of the BOP accounts are included they must sum to zero with no overall surplus or deficit. For example, if a country is importing more than it exports, its trade balance will be in deficit, but the shortfall will have to be counterbalanced in other ways – such as by funds earned from its foreign investments, by running down central bank reserves or by receiving loans from other countries.
While the