Gross stocks of foreign assets have increased rapidly relative to national outputs since 1990, and the short-run capital gains and losses on those assets can amount to significant fractions of GDP. These fluctuations in asset values render the national income and product account measure of the...

A country's current-account balance over any time period is the increase in Residents' claims on foreign incomes or outputs, less the increase in similar foreign-owned claims on home income or output. Thus, in theory, the current account includes not only exports less imports (broadly defined to...

The intertemporal approach views the current-account balance as the outcome of forward-looking dynamic saving and investment decisions. This paper, a chapter in the forthcoming third volume of the Handbook of International Economics, surveys the theory and empirical work on the intertemporal...