ABSTRACT
Balance-of-payments accounting is, to be candid, a less than fascinating topic, but it must be understood if the more interesting parts of international finance are to make any sense. Just as domestic macroeconomics would mean very little without an understanding of gross domestic product and related accounting concepts, international finance requires an understanding of the payments accounts. In addition, people who work in the area of international economics are usually assumed to understand balance-of-payments accounting, and they often spend significant amounts of time interpreting these accounts for countries in which their employers have an interest. Although these accounts are hardly fascinating, they are very important.
