A World Accounting Framework: Trade and Financial Flows between Developing Countdes and the Rest of the World

Joke Lurnk

Abstract


The patterns of trade and fmancial flows between different
parts of the world economy have changed dramatically over the last two
decades. These changes have been accompanied by large increases in
discrepancies in macroeconomic statistics. Published data sources on
global macroeconomic aggregates may be highly misleading because of
their lack of consistency. A first necessary step towards the analysis
of changes in the patterns of international trade and finance is
therefore to develop a consistent global accounting framework in which
international finance can be placed in relationship to international
trade and domestic accumulation: this framework we call the World
Accounting Matrix (WAM). The W AM is based on the concept that related
variables - international trade, fmancial flows and stocks, and domestic
saving and investments - should be presented in one framework that
explicitly takes the relationships between the variables into account.
It is an integrated data system centred around accumulation balances. It
presents aggregates in matrix format, for groups of countries. The
purpose of the W AM is (i) to bring data from various data sources
together in one framework in order to make better use of existing
statistics, (ii) to check for consistency and to disentangle
discrepancies both within and between data sources and to make
adjustments for the discrepancies, (iii) to provide an analytical
framework for the analysis of the effects of different types of
international capital flows and external shocks on economic growth and
stability in developing countries and the role of international capital
flows in the process of global adjustment.

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DOI: https://doi.org/10.30541/v31i4IIpp.655-665

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