# £

- ORs other governsent revenues (transfers from public enterprises, etc.)

- kDpu: interest payments for not external public debt (stock of external public debt less official reserves/assots times rea4 foreign interest rate)

- iDpr: interest payments on extarnal private debt (stock of external private debt times real foreign interest rate)

- NFS: net other factor services including workers, remittances and profit remittances (vorkers' remittances from Mexicans abroad reduces NFS, while profit remittances from foreign companies in Mexico increases NFS). In this measure we also include all other current account items not included elsewhere (e.g. transfers from abro.ad, etc.)

- w*BM: inflation tax (net of interest paid by central bank oA commercial bank deposits)

As we can see from identity (2) there are two ways of computing private saving. First, we can compute private saving directly by subtracting private consumption from disposable income, i.e., the first parenthesis on the right hand side of (2). Second, we can compute private saving indirectly as the difference between aggregate investment and the sum of public saving and foreign saving (current account deficit). Both measures would be identical if we use in identity (2) the same items from national accounts from identity (1). Howeve%-, it is common to compute private saving using the indirect measure using implicitly the government budget definition for G as well as the balance of payments figures for X-M (trade balance of goods and non-factor services). The convenience of the indirect procedure is that the items of the disposable income series in the first parenthesis in the righi. hand side of identity (2) do not have to be computed explicitly. The inconvenie-ce stems precisely from the fact that fiscal accounts and national accounts use incompatible definitions of current and capital expenditures.

## 2.2 Measurement Problems.

The three sources of data required for identity (2) are the balance of payments, the government budget and the national accounts. Several specific measurament problems associated to these sources are discussed in turn. We close the section with a discussion of the role of durable consumption in a measure of private saving.

## 2.2.1 Balance of Payments Data.

The official current dccount balance does not adequately measure real national financial dissaving in Mexico for at least four reasons: i) the measurement of income from foreign assets is not based on a comprehensive measure of the stock of foreign assets; ii) the official methodology employed to calculate worker's remittances until 1988 underestimates remittances; iii) capital gains induced by inflation are neglected; and iv) the difference in statistical basis between balance of payments data and national accounts data, e.g., the national accounts implicitly converts foreign currency units into domestic currency units at a trade-weighted exchange rate. In order to obtain a current account balance which would allow us to estimate private saving properly we deal in turn with factors i) to iii; factor iv) is discussed in sections 2.2.3 and 2.4.

## Other possible sources of inadequate current account measurement not