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Abstract
The year 1961 was marked by important changes in both surpluses and deficits in basic balances of payments (i.e., those arising out of international transactions on current and long-term capital account, excluding certain special transactions), and also in flows of short-term capital. The changes in the basic balances of various industrial countries, and of the primary producing countries as a group, occurred mainly in current account items. These balances were strongly influenced by the changes in economic activity, the relative rate of employment, and the associated movements in prices and costs in the major industrial countries, which have been described in Chapter 4, pages 73–79. Disequilibrating movements of short-term capital between major financial centers had imposed exceptionally severe pressures on the international payments mechanism in 1960 and the early months of 1961. These were successfully checked in the latter part of 1961, as a result of the changes in financial policies and other measures outlined in Chapter 4, as well as of the greater similarity in the cyclical positions of the industrial countries in 1961 than in 1960.
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