Franke-ViebachPage 1 Topic 10: International Economic Relations: Stocks and Flows Contents: 10.1 International Economic Transactions: Balance of Payments Basics The Accounts in More Detail 10.2 External Wealth: the International Investment Position 10.3 Relations to National Accounting Systems National Income Accounting National Wealth Accounting … Bibliography:

Franke-ViebachPage 2 10 International Economic Relations: Stocks and Flows International economic accounting systems: -economic relations of a country with foreign countries -ex-post International economic relations transactions: claims: - flows - stocks - recorded in „balance of - recorded in „international of payments“ (bop) investment position“ (IIP)

Franke-ViebachPage International Economic Transactions: Balance of Payments Basics (1) Content (a)all economic transactions between residents of a certain geographical area and non-residents (b) “(domestic) residents”: - natural persons domiciling in the reporting area - all other agents who mainly perform their economic activity there (c ) economic transactions and economic objects: Econ. transactions→ Econ. objects↓exchange unilateral transfer GoodsXX commoditiesXX servicesXX factor services XX AssetsXX

Franke-ViebachPage … (a)The bop as an account... (4) Presenting the balance of payments account: table: equation: didactic purpose usual official way in economic models of presentation

Franke-ViebachPage … (b) The bop as a table Exhibit (4b): The Balance of Payments of the Euro Area Source: European Central Bank (2012), p. S61.