Note: Single-source report; awaiting corroboration.
Balance-of-payments (BOP) deficits have been a significant focus for policymakers and economists, especially regarding how they should be measured and when they present concerns. The BOP is an accounting framework that records all economic transactions between United States persons and others worldwide using double-entry bookkeeping principles.
This framework, similar to business accounting, ensures that the overall balance of payments—as an accounting identity—must always balance. Therefore, a BOP deficit does not reflect an imbalance in the accounting identity itself but indicates a deficit within a particular subset of transactions under review.
Determining a BOP deficit requires selecting the subset of transactions most relevant to the economic question or policy at hand, meaning that measuring deficits is contextual and depends on the chosen subset.