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:
Please read the article via the links in the task requirements for week four. You may want to focus most attention on both the current and financial accounts. Overall, please make sure to develop an in-depth conversation on the balance of payments, the three main categories of payments, and reasons for why the U.S imports so much. I’ll give you a hint. Germany has found a way to retain its manufacturing base that the U.S. largely ignores.
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…