Double-entry bookkeeping and the balance of payments

Beretta, Edoardo; Cencini, Alvaro

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Conference paper (in proceedings)

Double-entry bookkeeping and the balance of payments : the need for a substantial, conceptual reform

Beretta, Edoardo ORCID Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera - Franklin University Switzerland
Cencini, Alvaro Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera

2020

Published in:

Bridging measurement challenges and analytical needs of external statistics: evolution or revolution? Proceedings of the IFC Conference on external statistics. - 2020

English On the basis of the identity between each country’s global imports and exports, which is one of the fundamental economic principles of the balance of payments, the paper highlights why the leading account of transactions from/to the rest of the world needs to be reformed. As a strategic goal, the balance of payments should finally move beyond its current purely statistical and simple-entry bookkeeping approach in order to improve its macroeconomic relevance. The creation of an economic account of the nation as a whole and the introduction of a consistent way of recording transactions following a truly double entry bookkeeping would also erase statistical discrepancies ex ante and reflect the necessary equality (identity) of credits and debits both for all transactions taken together and for each of them separately.

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