U.S. International Financial Flows and the U.S. Net Investment Position: New Perspectives Arising from New International Standards
This chapter describes plans by the U.S. Bureau of Economic Analysis (BEA) to restructure the financial account in the balance of payments (BOP) and the international investment position (IIP) to align their presentation and underlying concepts more closely with international standards recommended in the 6th edition of the Balance of Payments and International Investment Position Manual released in 2009. We explain how the proposed new presentation differs from the current presentation and provide experimental statistics based on currently published statistics that are reorganized according to the new international guidelines.
We describe some of the benefits of the restructured U.S. BOP and IIP statistics. For example, the new presentation will make it easier to analyze international portfolio investment flows. More detailed data on revised valuation changes in the IIP will allow rates of return to be calculated for more relevant functional categories of financial instruments. Statistics organized according to the new international guidelines will facilitate comparisons with the external financial flows and positions of other countries that follow these standards.
We present implications of the new presentation for measurement of rates of return on cross-border investment. Finally, we report on progress utilizing new data sources and on preparing the U.S. IIP on a quarterly basis.
Christopher Gohrband and Kristy Howell are both economists at the U.S. Bureau of Economic Analysis.
The views expressed in this paper are solely those of the authors and not necessarily those of the U.S. Bureau of Economic Analysis or the U.S. Department of Commerce. The authors wish to thank their colleagues at the U.S. Bureau of Economic Analysis, the organizers and participants of the NBER-CRIW Conference on Wealth, Financial Intermediation and the Real Economy, and two anonymous referees for their valuable comments. They also wish to thank Kyle Westmoreland for his assistance in preparing the estimates presented in the paper as well as Barbara Berman, Elena Nguyen, and Helen Bai for their contributions.