Abstract

14.1 This chapter provides an introduction to the use of balance of payments and international investment position data in economic analysis. Preceding chapters of this Manual present the concepts underlying the components used in the international accounts. The importance of this accounting and statistical reporting framework describing an economy’s international transactions and positions derives primarily from their impact on the domestic economy. Although the international accounts are sometimes called the “external sector” or “rest of the world sector,” they do not constitute a sector, in the sense of a group of institutional units with similar motivations. Rather, international accounts show the relationship between domestic sectors and the rest of the world. This chapter discusses some of these major links.