Рейтинг пользователей: / 1

УДК 339.727.22

Kyrychenko O.


Zaporizhzhya National Technical University 


The purpose of this paper is to bring an attention to the role the valuation effects play in their interaction with other components of the international accounts.

Keywords: international accounts; valuation effects; financial globalization.

Целью данного исследования является привлечение внимания к роли, которую играют эффекты стоимостной оценки при их взаимодействии с прочими компонентами международных счетов.

Ключевые слова: международные счета; эффекы стоимостной оценки; финансовая глобализация.

International accounts, as they determined in the International Monetary Fund’s Balance of payments and international investment position manual (BPM6) [1], represent accounts which summarize economic relations between residents of that economy and nonresidents. Since they consist of balance of payments and international investment position, including valuation effects and other changes in volume of foreign financial assets and liabilities, our purpose is to bring an attention to the role the valuation effects play in their interaction with other components of the international accounts.

The degree and the scale of the recent wave of financial globalization have increased enormously in both quantitative and qualitative aspects. According to [2], at the peak of this – the second and most powerful – wave of Financial globalization in 2007, the level of gross capital flows (both inflows and outflows) has increased significantly and amounted to more than 20% of world GDP. Accumulated stocks of gross foreign financial assets (a country’s residents’ financial claims on the rest of the world) and liabilities (the rest of the world’s financial claims on country’s residents), which represent one of the de-facto measures of financial globalization, have reached the level of 400% of industrial countries group GDP in comparing with only 45% in 1970; more than 150% of group GDP for both high-income developing countries and countries in transition. And even for the low-income developing countries this indicator was close enough to 100% of group GDP (author’s own calculations).

In line with such developments in globalization of international financial markets and along with traditional capital flows the scale of capital (wealth) transfers between countries has increased markedly. These international capital transfers, resulted from the impact of changes in asset prices and of exchange rates fluctuations on the value of gross and net foreign financial assets and liabilities, are nothing else than incurred capital (holding) gains and losses or so called (re-) valuation effects. The latter is the most important item of such balance of payments international accounts component as other changes in financial assets and liabilities account [1].

Increasing importance of valuation effects has brought its original tune to the interaction of international accounts components. For example, despite massive current account deficit, the U.S. net foreign liabilities position during 2002-2007 has remained broadly stable as a share of GDP. This development, together with the ease with which large and persistent U.S. current account deficit was financed, has suggested that under conditions of the increasingly integrated international financial markets such deficits are more likely sustainable. But, from the other hand, during the ongoing global financial crisis capital losses of the United States on its net foreign liabilities in 2008 have reached an unprecedented in history scale - $ 2 trillion, whereas the U.S. current account deficit increased by some $ 650 billion. At the same time, the euro area has experienced the corresponding capital gains on the order of $ 1 trillion and such large emerging market countries as China, Brazil, Russia, India and Korea – on the order of $ 200 billion [3].

Thus, the exploration of valuation effects in the context of their implication to the international accounts interaction should be at the top of the international policy agenda on equal among others important issues. It is necessary to be armed with accurate knowledge of not only the scale and the composition (currency, maturity, instruments) of gross and net external positions, but also how they reflect on the exchange rate and assets price changes. This knowledge is the key to understanding the degree of interdependence among countries as well as their respective external sustainability and financial vulnerability.

Moreover, since the balance of payments international accounts may be considered as the concentrated reflection of all the existing problems of individual economies in general or their domestic sectors economic development, as evidenced by the System of National Accounts [4] and the Balance of Payments general identities, further in-depth research of the valuation effects is supposed to have an important theoretical significance, as well as practical implications.

The conclusion drawn from the undertaken analysis are intuitive and narrative, and therefore require further verification and justification, based on extensive use of statistical material and conduct of econometric research.



  1. Balance of payments and international investment position manual. Sixth Edition (BPM6). – [Washington, D.C.]: International Monetary Fund, 2009. – 351 p.
  2. Blanchard O. Global Imbalances: in the Middle of the Stream? / Blanchard O. // KDI/IMF Conference on Reconstructing the World Economy. – February 25, 2010. – 27 p.
  3. Milessi-Ferretti G.M. Changing Fortunes / Milessi-Ferretti G.M. // Finance & Development, A Quarterly Publication of the International Monetary Fund. – March, 2009. – Volume 46, No. 1. – Р. 20–22.
  4. System of National Accounts 2008 : [EC, IMF, OECD, UN, WB]. – New York, 2009. – 662 p.




Секции-октябрь 2011
  • "Научные исследования и их практическое применение. Современное состояние и пути развития.'2011"
  • Дата: Октябрь 2011 года
  • Проведение: www.sworld.com.ua
  • Рабочие языки: Украинский, Русский, Английский.
  • Председатель: Доктор технических наук, проф.Шибаев А.Г.
  • Тех.менеджмент: к.т.н. Куприенко С.В., Федорова А.Д.

  • Сборник научных трудов SWorld по материалам международной научно-практической конференции.