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croshan Current account surplus
I am looking at the current account surplus data from WEO database as of April 2008. The current account surplus across the entire set of countries doesn't add up to zero. It should add up to zero because an export for a particular country is an import for another, and therefore when you add up the metric across countries, it should be zero. Any particular reason why this is not so?
5/8/2008 9:07:52 AM
WEOmoderator Re : Current account surplus
Good question. Here is the answer from our database FAQ:

A. In principle, since one country's export is another country's import, current account balances across the world should sum to zero. In practice, however, this is not the case. While a discrepancy is difficult to analyze by its very nature, there is broad agreement that the global current account discrepancy likely reflects in part the following economic factors:

-transportation lags, if exports are recorded in one year, while the corresponding imports are not recorded until the next;
-underreporting of investment income, partly related to tax evasion and the growth of offshore centers;
-asymmetric valuation, where the export and import of the same good are valued at different prices; and
-data quality issues, especially for transportation services and workers' remittances.
5/8/2008 9:16:11 AM