Income Payments - Economics
What are Income Payments?
Written by J. Mance Gordon
Updated at April 23rd, 2024
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What are Income Payments?
Income payments on assets, as the name implies, is income resulting from ownership of assets - including, interest, dividends, rents, royalties, etc.
The third component of the current account balance, labeled “income payments,” refers to money that U.S. financial investors received on their foreign investments (money flowing into the United States) and payments to foreign investors who had invested their funds here (money flowing out of the United States). The reason for including this money on foreign investment in the overall measure of trade, along with goods and services, is that, from an economic perspective, income is just as much an economic transaction as car, wheat, or oil shipments: it is just trade that is happening in the financial capital market.
Related Topics
- Trade Balance: Surplus and Deficit
- Mercantilism
- J Curve
- National Trade Data Bank
- Capital Account (Economics)
- Merchandise Trade Balance
- Current Account
- Income Payments
- Unilateral Transfer
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- Heckscher-Ohlin Model
- Linder Hypothesis
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- Financial Capital
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- Gain from Trade
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- Double Column Tariff
- Infant Industry Theory
- National Interest Argument
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- Dumping
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- Race to the Bottom
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- Effects of Trade Barriers
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- Infant Industry Theory for Restricting Imports
- What is the Anti-Dumping Argument for Restricting Imports?
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- Race to the Bottom
- Unsafe Consumer Products Argument for Restricting Imports?
- National Interest Argument for Restricting Imports
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