Balance of Payments

Balance of payments isn’t a phrase that enters general parlance very often. And can you blame people? It’s a vague financial term that’s usually included in conversations in spirit but not actually in form.

Care to learn what it is? You’ve come to the right place. Balance of payments is, simply put, the measure of the flow of money between one country and another. It summarizes a country’s transactions with other countries over the course of a year and then sets that amount out in a report. These transactions are usually carried out via imports and exports, both in the form of goods and services.

So how’s the US Balance of Payments looking these days? Not that great. They’ve been running on a deficit for years now, at least in regards to their current account. This gap has slowly been closing over the last few years, however, as US exports increase.