Section 1
Capital Flows
Book
Version 3
By Boundless
By Boundless
Boundless Economics
Economics
by Boundless
5 concepts
![Thumbnail](../../../../../../figures.boundless-cdn.com/21159/square/dollars-and-percentage-gdp.jpg)
The Balance of Payments
The balance of payments (BOP) is a record of all monetary transactions between a country and the rest of the world.
![Thumbnail](../../../../../../figures.boundless-cdn.com/21158/square/account-balance-per-capita.jpg)
The Current Account
The current account represents the sum of net exports, factor income, and cash transfers.
![Thumbnail](../../../../../../figures.boundless-cdn.com/21161/square/rect-investment-in-austria.gif)
The Financial Account
The financial account measures the net change in ownership of national assets.
The Capital Account
The capital account acts as a sort of miscellaneous account, measuring non-produced and non-financial assets, as well as capital transfers.
Reason for a Zero Balance
Equilibrium in the market for a country's currency implies that the balance of payments is equal to zero.