The growing economic interdependence of the world economy, including the internationalization of markets for goods, services, factors of production, and financial assets is creating increasing demands for measuring and monitoring economic influences from beyond a country's borders. The substantial impact on the U.S. economy of the foreign oil shocks during the 1970s and the international repercussions of sharp policy shifts and structural change in the 1980s have clearly rendered obsolete any lingering conventions of closed-economy measurement and assessment. As efforts to consult on and coordinate policies across countries mount in response to changing patterns of trade, growing external imbalances, and fluctuating exchange rates, there is a further impetus for each country's mneasurement and monitoring of international transactions to be comparable to that of other countries. This proposal is to convene a two-day conference in Washington, D.C. in the Fall of 1989 on international economic transactions. The project commissions papers that advance measurement, policy assessment and knowledge in this substantive area. Each paper is empirical, and each attempts to answer an important research question using data from a choice of sub-areas. Finally, each paper assesses the quality of data in one of these sub-areas: prices and costs of traded goods and services; relations among trade, output and consumption; trade in services; direct investment and embodied trade in primary inputs; cross national stocks and flows of financial capital; and measurement of policy. Illustrative of research questions addressed are how to compare price indexes of traded goods and correct them for quality change, how to identify determinants and size of trade and direct investment in services, and how to measure non-tax, non-tariff policy initiatives and their effects. Concern is increasing within the broader scientific community that international economic data are in need of critical asssessment and significant overhaul. The time is ripe for drawing together researchers, policy analysts, and statistical staff of the highest professional reputation , with proven commitments to measurement and research of outstanding quality.
