Working Paper

Modeling investment income and other services in the U.S. international transactions accounts

Abstract: This paper presents the services account sector of a model of U.S. international transactions (the USIT model) that is maintained in the Division of International Finance of the Federal Reserve Board. Part I present the models for payments and receipts on direct investment, other investment income, and non-investment services. Part II reports on simulations that indicate the sensitivity of the model's forecast to changes in its predetermined variables such as interest rates and exchange rates. In particular, we explore the implications of large current account deficits and the resulting accumulation of net claims by foreigners on the United States for the services balance.

Keywords: Investments, Foreign; Balance of payments; International trade;

Bibliographic Information

Provider: Board of Governors of the Federal Reserve System (U.S.)

Part of Series: International Finance Discussion Papers

Publication Date: 1987

Number: 319