News Column

Research Data from International Monetary Fund Update Understanding of Income and Wealth

June 28, 2014

By a News Reporter-Staff News Editor at Investment Weekly News -- Fresh data on Income and Wealth are presented in a new report. According to news reporting from Washington, District of Columbia, by VerticalNews journalists, research stated, "While the balance sheet approach has increased the focus on position data, differences in valuation practices for foreign direct investment (FDI) make cross-country comparisons difficult. To enhance comparability, the IMF's Balance of Payments and International Investment Position Manual, sixth edition, which some countries have already implemented and others will implement in the coming years, recommends seven methods for valuation of unlisted FDI."

The news correspondents obtained a quote from the research from International Monetary Fund, "This paper demonstrates that both the valuation method and simple differences in estimation techniques can fundamentally change a country's financial balance sheet. Using Denmark as an illustration, unlisted FDI equity liabilities vary from 22 to 156 percent of GDP when applying different estimation techniques, but just one valuation method, price to earnings. These measurement uncertainties can lead to important misunderstandings and affect policy recommendations, thus pointing to the need for further international harmonization."

According to the news reporters, the research concluded: "While the results are presented in an FDI context, the uncertainties also apply to other macroeconomic datasets, including national accounts statistics."

For more information on this research see: Foreign Direct Investment And The External Wealth Of Nations: How Important Is Valuation? Review of Income and Wealth, 2014;60(2):245-260. Review of Income and Wealth can be contacted at: Wiley-Blackwell, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell -; Review of Income and Wealth -

Our news journalists report that additional information may be obtained by contacting J. Damgaard, Int Monetary Fund, Washington, DC 20431, United States.

Keywords for this news article include: Washington, United States, Income and Wealth, District of Columbia, Investment and Finance, North and Central America

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Source: Investment Weekly News

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