What is the excess of the current account?

The excess of the current account is when certain types of money flow into the ground faster than it flows. This includes money for export and import, money such as interest and dividends and money paid without something in return, such as foreign aid. The current account contrasts with a capital account that includes assets. The current account and capital account together form the country's payment balance. The first is a business balance. This simply measures the total value of the country's goods and services as an entire export, minus the total value of the goods and services it imports. All money counted in this measure concerns specific purchases. They may include raw materials and other items that businesses use rather than buying directly consumers.

The second part is a factor income. It primarily covers the revenue of the investment's investment in one country in companies or other interests in another country, such as dividends or interest. For statistical purposes, money sent by people working in one country relatives or friendsIn another country, known as remittances, the intake of factor is expected.

The final part of the surplus or the current account deficit is transfer payments. These are the money that moves unilaterally without direct expectation of the return. In connection with the national economy, this is most commonly considered to be foreign assistance. This may be politically problematic because the generosity of the country can be reflected as negative in its international economic performance.

Excess current account is the authorization of economists to strengthen the country's net foreign assets. As a very harsh analogy, this is the equivalent of the Earth's balance, positive or negative, in the global bank. This is how much country owes or owes on a global basis. In practice, economists are questioned whether negative net foreign assets or a current account deficit are really a problem. The reason is that the country literally owes all the money that makes upCurrent and capital accounts. One thought school is that the current account deficit is more of a symptom of potential economic problems than a definitive cause.