Abstract

This paper tests the hypothesis that residual values in balance of payment accounting are a random variable Previous research in this area has been satisfied with an explanation that these residual values are just statistical discrepancies and are random in nature This paper reveals a structural problem with the way balance of payment accounting has been set up and data are collected The research proves that there is a positive bias about these values Moreover the research shows that there is a positive relationship between the size of the illicit drug market and the statistical discrepancies in the U S balance of payments