THE BALANCING ITEM IN AUSTRALIA BALANCE OF PAYMENTS ACCOUNTS - AN IMPRESSIONISTIC VIEW

The balancing item in the Australian balance of payments has been incr easing in magnitude and volatility, violating with increasing frequenc y internationally agreed acceptability criteria of smallness. This inv estigation examines the temporal evolution of the balancing item, iden tifying structural breaks that are plausible a priori. It also explore s alternative data-driven and structural approaches to the diagnosis o f the errors and omissions in the statistical record.