Balance of Payments Analysis -the case of non-Euro area member – United Kingdom

Chapter I
Theoretical foundations of BOP
1. Historical approach to BOP………..4
Mercantilism………..4
2. Key definitions of BOP……….. 5
2.1. The Balance of Payments (BOP) definition……….. 5
2.2. Resident and nonresident……….. 6
2.3. Territory………..7
2.4. Unit of an account……….. 7
3. Fundamental principles in BOP preparation………..8
3.1. Double-entry system………..8
3.2. Credits and Debits……….. 9
3.3. Accrual basis of BOP accounting……….. 9
3.4. Timing of transactions ………..10
3.5. Valuation of transactions ………..10
4. Standard Presentation of the BOP ………..11
4.1. The structure of standard presentation of the BOP……….. 11
4.2. Current Account ………..12
4.3. Capital Account ………..13
4.5. Financial Account……….. 13
4.6. Reasons, purpose of the BOP standard presentation……….. 14
5. Analytic presentation of the BOP ………..14
5.1. Structure of the BOP analytic presentation ………..14
5.2. Reasons of the BOP analytic presentation ………..15
6. Foreign Exchange Rate – Historical Approach……….. 15
6.1 The Gold Standard System and World War II……….. 15
6.2 The Bretton Woods Conference……….. 16
6.3 The Postwar Situation……….. 16
7. Foreign Exchange Rate Definition……….. 17
7.1. Fixed and Floating Exchange Rates Definitions……….. 17
7.2. Pros and Coins of Fix and Floating Exchange Rate……….. 18
7.3. Determinates of Exchange Rate……….. 19
7.4. Foreign Exchange Rates and Balance of Payments……….. 19
7.5. Analysis of Floating and Fixed Exchange Rate Mechanisms……….. 21
7.5.1. Floating Exchange Rate……….. 21
7.5.2. Fixed Exchange Rate……….. 22

Chapter II
The Balance of Payments of United Kingdom Analysis
1. The United Kingdom’s economic features and history……….. 23
1.1. The Economic history overview of the United Kingdom……….. 23
2. The Balance of Payments Compilation in the United Kingdom……….. 25
2.1 The Balance of Payments of the United Kingdom Analysis……….. 26
2.2 The Current Account Analysis……….. 29
2.2 The Capital Account Analysis……….. 33
2.3 The Financial Account Analysis……….. 34
2.4 The Exchange Rate in Balance of Payments Analysis……….. 35
2.5 Conclusions……….. 38