SPECIALIZATION IN MACROECONOMIC FINANCIAL ACCOUNTS

COURSE 1 : INTRODUCING FINANCIAL ACCOUNTS AND BALANCE SHEETS

1.1.
Financial systems at a glance
Introduction

DEPARTMENT OF SOCIAL SCIENCES AND ECONOMICS

Preview

• Giuseppe de Arcangelis, Professor of International Economics,

Department of Social Sciences and Economics, Sapienza University

• Sofia Poggi and Francesco Ruggeri, Department of Social Sciences

and Economics, Sapienza University

• Daniele Fano, Economist, co-author with Peter Van de Ven of

Understanding Financial Accounts (OECD, 2017

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Giuseppe De Arcangelis

• Welcome to Week 1 of Course 1

• You may find this first week somehow challenging and
demanding, as for any new learning endeavour.
• I believe you will "take home" some new tools or, should you
already be familiar with them, gain new useful perspectives
• Daniele Fano will "break the ice" and introduce the connection
between "real" and "financial" accounts
• Sofia Poggi and Francesco Ruggeri will help you become familiar
with databases and their use.

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Sofia Poggi and Francesco Ruggeri

• We will follow you along all the lectures

• We have created A smart guide to build datasets through
institutional sources
• This guide will be of help to you in the exercise at the end of
each lecture
• This course will thus end up with a "Handbook" on official
statistics and their use.

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Daniele Fano: warming up

• When designing this course we asked ourselves what could be the

best way to get started.

• We decided to take you right away to an overview of the "heart of the

matter".

• We hope this will help you have a first idea of what you can "take
home" from this course: insights, logical reasoning, tools for
improving the quality of your work.
The importance of indicators

• Quick and reliable indicators are what we look for, be it for the
quality of products, for personal health tests, for financial situations
or other cases that require essential knowledge and potential
actions.

• Then of course we also like to understand what is "behind an

indicator".

• In this course we will follow the same process. We will introduce the
indicators and then develop the detailed understanding of the
underlying logics and their relative "pros" and "cons".
So what about a quick first assessment of the macro
financial situation of a country?

For example, I would like to look at the external balance, i.e. does a
country exports more goods and services than it imports or vice-versa?
And to what extent?

I will also want to look more broadly at the financial situation within a
country:
– To what extent households acquire financial instruments issued
by corporations, government or the rest of the world?
– Is government showing a deficit and if so, does it appear
worrying? And who owns the debt issued by government?
– Are corporations heavy borrowers or are they financially
independent ?
Figures at a glance

Table 1.1.1

This is a first post-

covid snapshot

Spot the
differences across
countries!

Ideas about
possible uses ?

Source: The Economist, June 6 2020

Insights and progress

• Once I have gathered a group of key indicators I will consider

them for a first insight

• I will then decide if I need to further enquire and in what

directions.

• This course is about the tools needed to make such

progress.