Importance of Global Financial Stability Essay Example

uses a method in order to prepare the balance of payments of the U.

S. The method consists in constructing the balances of payment statements. These are divided into three parts: part one provides a brief explanation on how the balances of payments are used In constructing the statement on the International position of the unites States and how payments are incorporated in the into the U. S national income and products accounts.

In part two and three, the concept, data sources and estimating procedures are discussed (Mosbacher, Darby, Young, & Carson, 1990).According to Bureau of economic analysis quarterly report for the 2012 The output of goods and services In the national economic accounts produced by labor and property located in the United States increased at an annual rate of 1. 8 percent in the first quarter of 2013 (U. S. Economy at a Glance: Perspective from the BEA Accounts, 2013).

In the information provided in the same press release for International economic accounts ' during the first quarter of 2013 the current balance is -$106. 1 Billion, the U. S current account deficit increased $3. 8 billion from the fourth quarter of 2012.According to he last annual revision on the balance of payments on international transactions ITAs, new methods were introduced that would improve the accuracy and consistency of the statistics in the U. S economy and international economies (Berman ; Bogen, 2013).

During the same quarter the international investment position for the fourth quarter in year 2012 was -$3863. 9 billion, by the first quarter of 2013 the net international investment position is at -$4,277. 1 billion. In 2013 the international trades in

goods and services balances for April 2013 were: -$40. 1 billion and in May 2013 a deficit of -$45.

llion (U. S. Economy at a Glance: Perspective from the BEA Accounts, 2013).A balance of Payments provides detailed information for a country to identify areas of opportunities that can have a greater impact in economy. Countries can use this information to understand how other countries are performing.

It is really important to know how many goods and services are being exports and how much is being imported. This information helps maintain a global financial stability. The balance of payments facilitates international flow of financial capital for trading and financial purposes.One of its functions is to promote transparency between countries and effectively abide by regulations. According to the World Health Organization: Global financial system can be defined as various official and legal arrangements that govern international financial flows in the form of loan investment, payments for goods and services, interest and profit remittances.

This is achieved by monitoring the economic and financial stability of countries with balance of payments difficulties. Works Cited National Research Council . (1995).