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- Balance_of_payments abstract "Balance of Payment (BoP) of a country is defined as, "Systematic record of all economic transactions between the residents of a foreign country" Thus balance of payments includes all visible and non-visible transactions of a country during a given period, usually a year. It represents a summation of country's current demand and supply of the claims on foreign currencies and of foreign claims on its currency.Balance of payments 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 overall BOP accounts will always balance when all types of payments are included, imbalances are possible on individual elements of the BOP, such as the current account, the capital account excluding the central bank's reserve account, or the sum of the two. Imbalances in the latter sum can result in surplus countries accumulating wealth, while deficit nations become increasingly indebted. The term "balance of payments" 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 if sources of funds (such as export goods sold and bonds sold) exceed uses of funds (such as paying for imported goods and paying for foreign bonds purchased) by that amount. There is said to be a balance of payments deficit (the balance of payments is said to be negative) if the former are less than the latter.Under a fixed exchange rate system, the central bank accommodates those flows by buying up any net inflow of funds into the country or by providing foreign currency funds to the foreign exchange market to match any international outflow of funds, thus preventing the funds flows from affecting the exchange rate between the country's currency and other currencies. Then the net change per year in the central bank's foreign exchange reserves is sometimes called the balance of payments surplus or deficit. Alternatives to a fixed exchange rate system include a managed float where some changes of exchange rates are allowed, or at the other extreme a purely floating exchange rate (also known as a purely flexible exchange rate). With a pure float the central bank does not intervene at all to protect or devalue its currency, allowing the rate to be set by the market, and the central bank's foreign exchange reserves do not change.Historically there have been different approaches to the question of how or even whether to eliminate current account or trade imbalances. With record trade imbalances held up as one of the contributing factors to the financial crisis of 2007–2010, plans to address global imbalances have been high on the agenda of policy makers since 2009.The current account shows the net amount a country is earning if it is in surplus, or spending if it is in deficit. It is the sum of the balance of trade (net earnings on exports minus payments for imports), factor income (earnings on foreign investments minus payments made to foreign investors) and cash transfers. It is called the current account as it covers transactions in the "here and now" – those that don't give rise to future claims.The Capital Account records the net change in ownership of foreign assets. It includes the reserve account (the foreign exchange market operations of a nation's central bank), along with loans and investments between the country and the rest of world (but not the future regular repayments/dividends that the loans and investments yield; those are earnings and will be recorded in the current account). The term "capital account" is also used in the narrower sense that excludes central bank foreign exchange market operations: Sometimes the reserve account is classified as "below the line" and so not reported as part of the capital account.Expressed with the broader meaning for the capital account, the BOP identity assumes that any current account surplus will be balanced by a capital account deficit of equal size – or alternatively a current account deficit will be balanced by a corresponding capital account surplus: The balancing item, which may be positive or negative, is simply an amount that accounts for any statistical errors and assures that the current and capital accounts sum to zero. By the principles of double entry accounting, an entry in the current account gives rise to an entry in the capital account, and in aggregate the two accounts automatically balance. A balance isn't always reflected in reported figures for the current and capital accounts, which might, for example, report a surplus for both accounts, but when this happens it always means something has been missed – most commonly, the operations of the country's central bank – and what has been missed is recorded in the statistical discrepancy term (the balancing item).An actual balance sheet will typically have numerous sub headings under the principal divisions. For example, entries under Current account might include: Trade – buying and selling of goods and services Exports – a credit entry Imports – a debit entry Trade balance – the sum of Exports and Imports Factor income – repayments and dividends from loans and investments Factor earnings – a credit entry Factor payments – a debit entry Factor income balance – the sum of earnings and payments.Especially in older balance sheets, a common division was between visible and invisible entries. Visible trade recorded imports and exports of physical goods (entries for trade in physical goods excluding services is now often called the merchandise balance). Invisible trade would record international buying and selling of services, and sometimes would be grouped with transfer and factor income as invisible earnings.The term "balance of payments surplus" (or deficit – a deficit is simply a negative surplus) refers to the sum of the surpluses in the current account and the narrowly defined capital account (excluding changes in central bank reserves). Denoting the balance of payments surplus as BOP surplus, the relevant identity is".
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- Balance_of_payments wikiPageExternalLink www.fedstats.gov.
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- Balance_of_payments wikiPageExternalLink Foreign%20Exchange%20Report%20February%204%202011.pdf.
- Balance_of_payments wikiPageID "317064".
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- Balance_of_payments subject Category:Economic_indicators.
- Balance_of_payments subject Category:International_finance.
- Balance_of_payments subject Category:International_macroeconomics.
- Balance_of_payments subject Category:National_accounts.
- Balance_of_payments comment "Balance of Payment (BoP) of a country is defined as, "Systematic record of all economic transactions between the residents of a foreign country" Thus balance of payments includes all visible and non-visible transactions of a country during a given period, usually a year.".
- Balance_of_payments label "Balance des paiements".
- Balance_of_payments label "Balance of payments".
- Balance_of_payments label "Balanza de pagos".
- Balance_of_payments label "Balança de pagamentos".
- Balance_of_payments label "Betalingsbalans".
- Balance_of_payments label "Bilancia dei pagamenti".
- Balance_of_payments label "Bilans płatniczy".
- Balance_of_payments label "Zahlungsbilanz".
- Balance_of_payments label "Платёжный баланс".
- Balance_of_payments label "ميزان المدفوعات".
- Balance_of_payments label "国际收支".
- Balance_of_payments label "国際収支統計".
- Balance_of_payments sameAs Platební_bilance.
- Balance_of_payments sameAs Zahlungsbilanz.
- Balance_of_payments sameAs Ισοζύγιο_πληρωμών.
- Balance_of_payments sameAs Balanza_de_pagos.
- Balance_of_payments sameAs Ordainketa-balantza.
- Balance_of_payments sameAs Balance_des_paiements.
- Balance_of_payments sameAs Neraca_pembayaran.
- Balance_of_payments sameAs Bilancia_dei_pagamenti.
- Balance_of_payments sameAs 国際収支統計.
- Balance_of_payments sameAs 국제수지.
- Balance_of_payments sameAs Betalingsbalans.
- Balance_of_payments sameAs Bilans_płatniczy.
- Balance_of_payments sameAs Balança_de_pagamentos.
- Balance_of_payments sameAs m.01tzw5.
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