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The balancing item in Australia's balance of payments accounts: an impressionistic view

The balancing item in the Australian balance of payments has been increasing in magnitude and volatility, violating with increasing frequency internationally agreed acceptability criteria of smallness. This investigation examines the temporal evolution of the balancing item, identifying structural breaks that are plausible a priori. It also explores alternative data-driven and structural approaches to the diagnosis of the errors and omissions in the statistical record.