Revision Presentation: Balance of Payments

The balance of payments (BOP) records all financial transactions made between consumers, businesses and the government in one country with other nations.

The current account measures the difference between money and credit going in and out of an economy (through exports, imports and income paid on assets both home and abroad)

In this revision presentation we look at some of the causes of current account deficits and surpluses and also consider the significance of trade imbalances for countries concerned. Which policies are likely to be most effective in the short run and medium term in improving a country's current account performance?