Talk:Current account (balance of payments)

Account definitions

 * The current account, capital account, financial account and change in official reserves together sum to zero as a result of accounting definitions.

This conflicts with balance of payments which appears to say that the financial and capital accounts are the same thingoip. -- Beland 23:55, 24 October 2006 (UTC) --195.195.255.50 12:22, 10 October 2007 (UTC) The capital and financial accounts are different, although they both belong on the opposite side of the BoP. The K account is generally quite insignificant, so many textbooks say it is the same thing as the Financial account. [Eric 14:25, 29 October 2006 (AEST)]
 * So can we remove the "dubious assertion," or should we wait for an empirical explanation as requested below? -- Andersem

Not sure the exact answer to this question, but I do know that there has been a change in naming conventions in recent years. Either the capital account or the financial account used to be referred to by the opposite name a few decades ago.

When interest rates are cut, inflation ultimately increases as spending rises. So in trying to control current account deficit by reducing inflation, it is necessary to increase interest rates (not cut them) - koko

The "dubious" distinction should be removed. As per the CFA Institute, balance-of-payment accounting tracks the exchange of funds of a country with its external trading partners. The central equation of this accounting methodology is as follows:

current account + capital account + offical reserve account = 0

The capital account and financial account are generally used as interchangeable terms.

LeBas 14:26, 15 March 2007 (EST)

This article is written in very inaccessible language. It uses technical accounting terminology that confuses the heck out of me, even though I have been investing in the share market and paying attention to macroeconomic movements for the past twenty years. Unfortunately, I don't have enough knowledge of the subject to confidently edit it. It would be appreciated if this could be re-written in a more accessible format by someone who has this confidence.

Adam —Preceding unsigned comment added by 192.94.41.42 (talk) 17:58, August 30, 2007 (UTC)

Empirical measurement
How is this figure empirically determined for any given country? -- Beland 00:00, 25 October 2006 (UTC)

Dividends
The article says "However, for the few countries with substantial overseas assets or liabilities, net factor payments may be significant". FOr example, Czechia has trade surplus, but current account deficit at the same time, mostly due to dividend transfers. Does it mean it has "substantial overseas liabilities"? I am not sure, I do not understand the sentence (BTW why overseas?, why not foreign?) —Preceding unsigned comment added by Jirka6 (talk • contribs) 04:18, 7 September 2007 (UTC)

Australia bit removed
I removed this bit, because I read the citation and it doesn't say anywhere in the citation anything like what the sentence says. Australia is running a trade deficit, not a surplus, and it also has a income deficit?

This however is not always the case with secluded economies such as that of Australia featuring an income deficit larger than its trade surplus.

Usage of the term "Balance of payments" (BOP)
Because the term "Balance of payments" (BOP) is used with different meanings, I think that, at a minimum, a "flag" in the form of a parenthetical note should be added whenever a paragraph uses the term in a way different from its previously defined, precise meaning. Thus, for instance, I would add "(used loosely)" after "balance of payments" in this sentence in the middle of the third introductory paragraph: "The term "balance of payments" (used loosely) often refers to this sum: a country's balance of payments is said to be in surplus (equivalently, the balance of payments is positive) by a specific amount...." Doing flagging of this sort will enable the reader, especially a non specialist reader, to read the sentence without feeling confused or feeling that the writer was confused. If there is no objection, after the passage of a period of time, to what I have just recommended, then I probably will make this change, myself. Wikifan2744 (talk) 19:39, 8 February 2014 (UTC)

Dr. Gabrisch's comment on this article
Dr. Gabrisch has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

"(1) At least, it should be mentioned that there is a third position in the bop, that is errors and ommissions; each bop includes such a position. (2) It should be useful to mention that the bop records only payments that crossed the border that is, a resident agent receives from a non-resident one. This is an important statement for it makes the bop different to trade statistics, which includes only goods and services that crossed physically the border. Therefore, there might be discrepancies in accounting values. Hence, it is not precise to write that a current account surplus is equal to a trade surplus. (3) Absorption is domestic private consumption plus private investment plus government spending (including public consumption plus public investment). (4) From accuracy, it is not correct to write "....if some other economies are lending their savings". Savings are net exports, and they cannot be lend twice! (5) An export is not per se an inflow of money but a claim on foreign gdp. Payment in money is cash, a very seldom event in international economics. (6) The Pitchford thesis is discussed too lengthyly. It is an extreme position, reduced by P. to the case of a floating exchange rate. (7) After Stiglitz, please insert: Other Keynesians claim that the expansion of autonomous capital flows in integrated and liberalized financial markets caused trade imbalances via an appreciation or depreciation of the real exchange rate. (Source: Hubert Gabrisch: ‘Cross-border finance, trade imbalances and competitiveness in the euro area’. MPRA Paper No. 68518, 2015. Download: https://mpra.ub.uni-muenchen.de/68518/ (8) I think that the chapter on OECD trade statistics is redundant in this context. It should be important to mention some measurement problems. For example, a current account balance can be assembled only in the context of different currencies. Therefore, it is almost impossible calculating a current account between Italy and Germany or between Berlin (Germany) and Hamburg (Germany). Insofar, authors who mention current account imbalances in the euro area mean in fact trade imbalances."

We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.

We believe Dr. Gabrisch has expertise on the topic of this article, since he has published relevant scholarly research:


 * Reference : Gabrisch, Hubert & Staehr, Karsten, 2014. "The euro plus pact: cost competitiveness and external capital flows in the EU countries," Working Paper Series 1650, European Central Bank.

ExpertIdeasBot (talk) 16:10, 11 July 2016 (UTC)

Dr. Coricelli's comment on this article
Dr. Coricelli has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

"The note is rather confusing. It misses completely the relationship between the current account and national accounts, with the current account being equal to the difference between savings and investments. It should mention at the outset that the balance of payments is compiled according to the double entry technique.  It misses two fundamental recent developments in the literature: First the literature on global imbalances (Bernanke, B (2005): “The global saving glut and the U.S. current account deficit,” speech at the Sandridge Lecture, Richmond, March 10;  International Monetary Fund (2005), “Global imbalances: A saving and investment perspective”, Chapter II, World Economic Outlook, September). Second the literature on "sudden stops" by Calvo et al. (“Capital Flows and Capital-Market Crises: The Simple Economics of Sudden Stops,” Journal of Applied Economics, November 1998. Also in G. Calvo Emerging Capital Markets in Turmoil: Bad Luck or Bad Policy?, Cambridge, MA: MIT Press 2005)."

We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.

We believe Dr. Coricelli has expertise on the topic of this article, since he has published relevant scholarly research:


 * Reference : Coricelli, Fabrizio & Ravasan, Farshad R & Worgotter, Andreas, 2013. "The origins of the German current account surplus: Unbalanced productivity growth and structural change," CEPR Discussion Papers 9527, C.E.P.R. Discussion Papers.

ExpertIdeasBot (talk) 20:14, 24 September 2016 (UTC)

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"Curent account balance" listed at Redirects for discussion
An editor has asked for a discussion to address the redirect Curent account balance. Please participate in the redirect discussion if you wish to do so. Reyk YO! 13:01, 4 November 2019 (UTC)

Cumulative Current Account Balance Map Ambiguity
The map titled 'Cumulative Current Account Balance' depicts Japan and the US in the color black. Is this at the high end of the positive scale, or at the low end of the negative scale? LorenzoB (talk) 02:15, 23 December 2019 (UTC)

Current account in economy
Current account 103.159.43.234 (talk) 06:02, 28 January 2023 (UTC)