This paper discusses and analyzes the United States balance of payments, an overall statement of all economic transactions between the U.S. and all other countries over a year’s time.
This paper analyzes line-by-line the tables that represent the Balance of Payments and show the amount of money received from other parts of the world and the amount spent abroad. The author concludes that the recession of 2001 had only a marginal impact on the trade deficit, mostly because the rest of the world had weakened along with the U.S..
Table of Content
Introduction
Item Analysis
Current Account
Capital Account
What the Balance of Payments Says About the Economy
Balance of Payments in 2000 and 2001
Year 2000
Balance of Payments Data 2000 and 2001($millions)
Comparison of U.S. Balance of Payments Current Account Data Line 18-38
Comparison of U.S. Balance of Payments Data Capital Account
Analysis
Table of Content
Introduction
Item Analysis
Current Account
Capital Account
What the Balance of Payments Says About the Economy
Balance of Payments in 2000 and 2001
Year 2000
Balance of Payments Data 2000 and 2001($millions)
Comparison of U.S. Balance of Payments Current Account Data Line 18-38
Comparison of U.S. Balance of Payments Data Capital Account
Analysis
Basically, the first section of the balance of payments is made up of a current balance, which summarizes imports and exports; net income on investments, such as payments of profits and interest on debt; and transfers between individuals. The second section represents a capital balance of payments that records investments and loans, including those made by multinationals and banks. U.S. Exports include all goods or services produced in the U.S. and sold to other countries in the international market. U.S. Imports are goods or services produced in other countries and sold in the United States. An increase in U.S. receipts (such as an increase in U.S. exports) will lead to increased demand for dollars and an increased supply of foreign currency on foreign exchange markets.