xBookUtils.terms['fn_5_1'] = "In the past, both the financial and capital accounts were jointly known as “the capital account.” This change should be kept in mind not only when consulting older documents but also when listening to contemporary discussion because not everyone cares for the new (and somewhat confusing) nomenclature.";
xBookUtils.terms['fn_5_2'] = "Note that intermediate inputs sold by home firms and purchased by other home firms cancel out in GDP, in both closed and open economies. For example, suppose there are two firms A and B, and Firm A makes a $200 table (a final good) and buys $100 in wood (an intermediate input) from Firm B, and there is no trade. Total sales are $300; but GDP or value added is total sales of $300 minus the $100 of inputs purchased; so GDP is equal to $200. Now suppose Firm B makes and exports $50 of extra wood. After this change, GDP is equal to $250. You can see here that GDP is not equal to the value of final goods produced in an economy (although it is quite often claimed, mistakenly, that this is a definition of GDP).";
xBookUtils.terms['fn_5_3'] = "GNI is the accounting concept formerly known as GNP, or gross national product. The term GNP is still often used, but GNI is technically more accurate because the concept is a measurement of income rather than product. Note that taxes and subsidies on production and imports are counted in GNE (both) and GDP (production taxes only). This treatment ensures that the tax income paid to the home country is properly counted as a part of home income. We simplify the presentation in this textbook by assuming there are no taxes and subsidies.";
xBookUtils.terms['fn_5_4'] = "Irish GDP might have been inflated as a result of various accounting problems. Some special factors exacerbated the difference between GDP and GNI in Ireland, such as special tax incentives that encouraged foreign firms to keep their accounts in a way which generated high profits “on paper” at their low-tax Irish subsidiaries rather than in their high-tax home country. For these reasons, many economists believe that Irish GNI, despite being more conservative, might be a truer measure of the economy’s performance.";
xBookUtils.terms['fn_5_5'] = "Joe Cullen, “There’s Lies, Damned Lies, and Wealth Statistics,” Irish Times, May 1, 2004.";
xBookUtils.terms['fn_5_6'] = "In 1991, the United States was in the unusual position of being a net recipient of unilateral transfers: this was a result of transfer payments from other rich countries willing to help defray U.S. military expenses in the Gulf War.";
xBookUtils.terms['fn_5_7'] = "Here, the government includes all levels of government: national/federal, state/regional, local/municipal, and so on.";
xBookUtils.terms['fn_5_8'] = "Menzie D. Chinn and Hiro Ito, 2007, “Current Account Balances, Financial Development and Institutions: Assaying the World ‘Saving Glut,’” Journal of International Money and Finance, 26(4): 546–569.";
xBookUtils.terms['fn_5_9'] = "Officially, following the 1993 revision to the System of National Accounts by the U.N. Statistical Office, the place where international transactions are recorded should be called “rest of the world account” or the “external transactions account.” The United States calls it the “international transactions account.” However, the older terminology was the “balance of payments account,” and this usage persists, so we adopt it here.";
xBookUtils.terms['fn_5_10'] = "The capital account does not include involuntary debt cancellation, such as results from unilateral defaults. Changes in assets and liabilities due to defaults are counted as capital losses, or valuation effects, which are discussed later in this chapter.";
xBookUtils.terms['fn_5_11'] = "This principle applies not only to market transactions, but also to nonmarket transactions such as gifts or foreign aid that are entered into the BOP accounts either as “net unilateral transfers” or into the capital account. For example, a $100 export of food aid is not a market transaction, but appears as a credit item in total exports. This credit is offset in the BOP accounts by a −$100 debit in net unilateral transfers. In this way, nonmarket gifts, for which nothing is offered in return, are properly recorded and yet leave the BOP accounts in balance.";
xBookUtils.terms['fn_5_12'] = "The BOP account is published each year as the “international transactions account (ITA)” by the BEA. The ITA uses a different geographical definition of the United States territory than the national income and product accounts (NIPA), so these figures do not exactly match those discussed earlier and in Table 5-1.";
xBookUtils.terms['fn_5_13'] = "Prior to 2007, the U.S. statistical discrepancy included unmeasured financial derivatives transactions. Starting in 2007, the BEA estimates these transactions, but they are not as yet broken down in detail into home and foreign assets. For clarity, they are not reported here and are included in the statistical discrepancy in Table 5-2.";
xBookUtils.terms['fn_5_14'] = "Data on the currency composition of U.S. external wealth from Cedric Tille, 2005, “Financial Integration and the Wealth Effect of Exchange Rate Fluctuations,” Staff Reports 226, Federal Reserve Bank of New York.";