Discuss the importance of the balance of payments as an accounting measure.

Assignment Description

One of the more important measures in regard to international economics is the balance of payments. Think of it as a national accounting measure that looks at the flow of goods and services into and out of an economy in a given period of time. It also shows capital flows into and out of a country. Until 1980, the United States tended to run a positive-to-neutral balance of payments position and was a creditor nation. In the course of the past 30 years, the United States has moved to a negative balance of payments and to being a debtor nation.

Review and discuss the following:

• Discuss the importance of the balance of payments as an accounting measure.
• Discuss the current account and its components and the capital and financial accounts and their components.
• How important is the U.S. deficit in traded goods in regard to the balance of payments?

Here are some relevant articles to help you with this assignment:

• The Changing Nature of the U.S. Balance of Payments
• Balance of Payments

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For assistance with your assignment, please use your text, Web resources, and all course materials.

References

Hellerstein, R., & Tille, C. (2008, June). The changing nature of the U.S. balance of payments. Current Issues in Economics and Finance, 14(4). Retrieved from https://www.newyorkfed.org/medialibrary/media/rese…

Stein, H. (2008). Balance of payments. The Concise Encyclopedia of Economics. Retrieved from http://www.econlib.org/library/Enc/BalanceofPaymen