Definition of Current Account Balance

Definition: The current account balance is the difference between a country's savings and its investment. "[If the current account balance is] positive, it measures the portion of a country's saving invested abroad; if negative, the portion of domestic investment financed by foreigners' savings."

The current account balance is defined by the sum of the value of imports of goods and services plus net returns on investments abroad, minus the value of exports of goods and services, where all these elements are measured in the domestic currency.

Terms related to The Current Account Balance:

• Balance of Payments
• Imports
• National Accounts

About.Com Resources on The Current Account Balance:

• What is the Current Account?
• The Trade Deficit and Exchange Rates
• Does Freer Trade Mean Lower Environmental Standards?

Writing a Term Paper? Here are a few starting points for research on The Current Account Balance:

Books on The Current Account Balance:

• Current-Account Sustainability
• The Role of the Current Account in Asset Market Models of Exchange Rate Determination
• G7 Current Account Imbalances: Sustainability and Adjustment

Journal Articles on The Current Account Balance:

• The Terms of Trade and the Current Account: The Harberger-Laursen-Metzler Effect
• The intertemporal approach to the current account
• The Current Account and Macroeconomic Adjustment in the 1970s