The author of Reading 17 informs us that there are 3 components to the BOP: 1. Current Account 2. Capital Account and 3. The Official Settlements Account He backs this up with a table on pg 533 which seems straight forward enough. … all well and good, until a different duo tell us in Reading 19 that the BOP are grouped into 2 categories: 1. Current Account and 2. Financial Account (Here, a footnote on page 576 relegates the capital account to just including small transfers like international gifts and debt forgiveness. It also appears as though the OSA is now bundled with the Financial Account). It looks to me like there is an inconsistency in the definition of the structure of the BOP. Have I missed a subtlety here? (Besides this R17 and R19 seem to duplicate quite a lot of information, hinting at a lack of rigorous editing).
Can’t recall but isn’t the OSA assumed constant so assume in 19 they are simply trying to show the relationships between the 3 i.e. looser monetry policy increases one decreases the other etc.
BishBosh Wrote: ------------------------------------------------------- > The author of Reading 17 informs us that there are > 3 components to the BOP: > > 1. Current Account > 2. Capital Account and > 3. The Official Settlements Account > > He backs this up with a table on pg 533 which > seems straight forward enough. > > … all well and good, until a different duo tell > us in Reading 19 that the BOP are grouped into 2 > categories: > > 1. Current Account and > 2. Financial Account > > (Here, a footnote on page 576 relegates the > capital account to just including small transfers > like international gifts and debt forgiveness. It > also appears as though the OSA is now bundled with > the Financial Account). > > It looks to me like there is an inconsistency in > the definition of the structure of the BOP. > > Have I missed a subtlety here? > > (Besides this R17 and R19 seem to duplicate quite > a lot of information, hinting at a lack of > rigorous editing). It seems that in Chapter 19 they are trying to follow the IMF convention, while what that was given in Chapter 17 was in line with economic literature. The capital account in the earlier reading is the sum of what we know as the Financial Account and the Capital Account in Chapter 19 (which is the IMF convention). It’s essentially the same thing. But I do agree - there is too much overlap, plus the inconsistency in the convention used is horrid.