The balance of payments records the value of Denmark’s economic transactions between Denmark and the rest of the world while the international investment position records the stock of foreign assets and liabilities.
The balance of payments records the value of Denmark’s economic transactions which are made within a given period between Denmark and the rest of the world.
The capital balance is a compilation of Denmark’s s foreign claims and debts (assets and liabilities) at a given time, e.g. by the end of a year.
The balance of payments can thus be regarded as a kind of profit and loss account, whereas the capital balance is a compilation of stocks. In this context, it must be mentioned that Denmark, as a small open economy, has substantial economic relations with the rest of the world seen in relation to the size of Denmark.
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