International finance, or 'open-country macroeconomics', is concerned with a country's international transactions in goods and assets. Several inter-related variables are involved, including balance of payments, exchange rates, real income and consumption over time and short- and long-term interest rates.

The balance of payments (the record of transactions between domestic residents and residents of foreign countries over a given period of time) consists of three elements: the current account, the capital account and official financing items including foreign borrowing by government and drawings on or additions to official reserves. The relationship between balance of payments and other variables is complex. Governments often attempt to manage this relationship through tools such as fixed or targeted exchange rates or manipulating interest rates. Since the collapse of the Bretton woods agreement on foxed exchange rates on the early 12970s, many countries have been concerned about the negative effect of volatile exchange rates on their economies. In the European union, the planned establishment of a currency union between EU members is designed to counteract such influences.