Balance of Payments (BOP) Accounts and Analysis
Full Review

Reviewed by: Chandrakant A. Patel, Consultant, World Bank, USA
Review posted 21 April 2005
Review No. 39

Information

Content: Provides a comprehensive conceptual, analytical, and applied introduction to the compilation and analysis of balance of payments statistics.
Date: 10 March 1999
Audience: Macro-economic analysts, policy makers, BOP statistics compilers, professors and students who want an introduction to BOP concepts, methodology, and compilation practices.
Size: 382 MB
Price: US$29.50
Manual needed: No
How to order:

International Monetary Fund
Publication Services, Catalog Orders
700 19th Street, N.W., Rm. 12-607
Washington, D.C. 20431, U.S.A.
Telephone: 202 623 7430
Fax: 202 623 7201
Email: publications@imf.org
More information on how to order available online.*

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Full Review

"Balance of Payments (BOP) Accounts and Analysis" developed by the IMF Institute provides a comprehensive conceptual, analytical, and applied introduction to the compilation and analysis of balance of payments statistics.

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Users

This course is aimed at both the compilers and users of balance of payments statistics. The compilers can learn how to classify and arrange balance of payments transactions in the form of standard and analytic presentations. Users can learn how to use these presentations for interpreting an economy’s transactions and balances with the rest of the world. The initial part of the course is easy enough to meet the needs of new entrants and policy makers. The latter part dealing with specific data issues is useful for the compilers, and the providers of technical assistance.

The course is based not only on the conceptual framework and guidelines contained in the IMF’s Balance of Payments Manual* and practical guidance provided in the BOP Guide* and the BOP Textbook*, but also on the analytical experience gained by IMF staff. Therefore the course could enhance the understanding of potential users like government and central bank officials, analysts, and policy makers along with university professors and students of macro and international economics.

*This link takes you outside the ADBI website. Please use the back button to return to ADBI.org.

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Content

The contents of the course are organized in terms of 86 objects. These are further subdivided into clips that are individually numbered for identification and convenience. The substance of the course is presented in the form of lectures organized as,

• Introduction covers BOP’s conceptual framework, accounting principles, concepts of residency and territory, and principles of recording valuation and timing.
• Standard Presentation outlines the concepts and methodologies of individual standard components ranging from merchandise to reserves, and related assets. Guidelines for classifying balance of payments transactions among these components are provided, and how the standard presentation is organized in terms of current, capital, and financial account is elaborated with graphical presentation.
• Analytic Presentation provides the analytic rearrangement of stated components to facilitate economic analysis, and derive alternative balances for economic interpretation of BOP surplus or deficit.
• International Investments Position deals with stock data while the balance of payments records flow data on international transactions.

The lectures or presentations are supported by practical numerical exercises on technical issues associated with each standard component, accounts, balance or overall presentation. Answers to the questions and solutions to the issues are provided with on-hand explanations.

All the lectures and solutions for technical issues are consistent with the BOP methodology. The course could benefit further if additional guidance on the compilation of International Investments Position (IIP), and the Quarterly Balance of Payments in which developing countries have to exercise initiatives is provided.

In addition to course material, the CD-ROM provides a library, glossary, calculator, note pads, and word pads with instructions on how to use them. The files in the Library list all the books and documents with outlines on the BOP methodology and compilation. The glossary provides explanations for all the important BOP terms as well as for the major macro-economic terminology, e.g. national accounts, money and banking, and government finance.

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User Friendliness

The CD-ROM is categorized into 86 objects (files) that can be accessed individually in any sequence. Within objects there are clips that can be run in sequential order but can also be skipped or jumped forward or backward as necessary. Each clip is numbered but not necessarily titled. Run time for each clip is provided and cumulative time is logged during operations.

For each object, where recourse is to be made for opening to other programs in the computer, links are provided. It was noted that as the CD-ROM is not consistent with the MD-DOS and Windows configurations, it is not possible to install the CD on the hard drive of all computers. The CD may not be compatible with recent vintage PCs.

A glossary, library, notepad, word pad, calculator, file listing, and help desk are provided as tools together with the instructions for using them. The calculator function is quite useful and handy for carrying out exercises on the notepad.

The glossary provided all the important BOP terms. However, it needs to be improved to incorporate additional relevant terms on international transactions e.g. debt forgiveness, exceptional financing and recent innovations in new financial instruments i.e. hedge funds. Some financial terms used in the lessons are not listed in the glossary.

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Navigability

It is possible to review past material at any time and skip, irrespective of sequential order, from one clip to another. This way analysts can select, listen, and study material for their own purpose while compilers can get detailed conceptual as well as technical knowledge to resolve complex compilation issues. Numerical exercises on technical issues are provided together with solutions.

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Interactive Facilities

The course is interactive, particularly for those who participate in the lectures and do the exercises. The lectures are supported with graphics and multimedia.

Concepts introduced during each clip are not reviewed with a final check towards the end of each lesson. There are questions during the lessons to check assimilation of information presented. The knowledge gained on classifications can be evaluated through the numerical exercises.

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Distribution

The CD-ROM can be purchased through the IMF website or by mail. The IMF is quickly responsive to requests for the materials. See the How to Order section above. Even though the cost of $29.50 does not seem high compared to the contents it could prove expensive to subscribers in developing countries where remittance costs for a small amount is likely to be equivalent to the purchase cost. IMF may wish to look into cash-on-delivery at a reasonable price. Back to Top

Sustainability

The contents of the course is based on the Balance of Payments Manual, 1993 and the 1993 System of National Accounts, therefore it is unlikely that fundamental BOP concepts and methodology will change frequently. The IMF should revise the contents whenever these manuals are revised.

BOP concepts are under continuous review by various working groups and experts. Some of their recommendations are occasionally issued as guidelines to BOP compilers for recording transactions arising from new innovations and situations in the international economy and financial and capital markets. These guidelines are also incorporated in the IMF Institute’s course material on BOP. Consideration should be given to updating the CD-ROM whenever such guidelines to compilers are issued or at least at a five year interval.

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