Abstract
The patterns of trade and fmancial flows between different parts of the world economy have changed dramatically over the last two decades. These changes have been accompanied by large increases in discrepancies in macroeconomic statistics. Published data sources on global macroeconomic aggregates may be highly misleading because of their lack of consistency. A first necessary step towards the analysis of changes in the patterns of international trade and finance is therefore to develop a consistent global accounting framework in which international finance can be placed in relationship to international trade and domestic accumulation: this framework we call the World Accounting Matrix (WAM). The W AM is based on the concept that related variables - international trade, fmancial flows and stocks, and domestic saving and investments - should be presented in one framework that explicitly takes the relationships between the variables into account. It is an integrated data system centred around accumulation balances. It presents aggregates in matrix format, for groups of countries. The purpose of the W AM is (i) to bring data from various data sources together in one framework in order to make better use of existing statistics, (ii) to check for consistency and to disentangle discrepancies both within and between data sources and to make adjustments for the discrepancies, (iii) to provide an analytical framework for the analysis of the effects of different types of international capital flows and external shocks on economic growth and stability in developing countries and the role of international capital flows in the process of global adjustment.
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