Breaking Down the Balance of Payments: Tracking Australia's Global Transactions

In this episode, we dive into the balance of payments—an essential tool for understanding a country’s economic relationship with the rest of the world. Learn how it's structured into the current account and the capital and financial account, what each component measures, and how the double-entry accounting system keeps the books balanced. We’ll also explain the role of net errors and omissions and why the current account balance is always offset by movements in the capital and financial account. Perfect for students and economics enthusiasts looking to grasp the big picture of international finance.

Source: RBA