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Follow the Money

Brad Setser tracks cross-border flows, with a bit of macroeconomics thrown in.

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The U.S. Income Balance Puzzle

by Brad W. Setser and Michael Weilandt November 3, 2024

The long-standing surplus in the U.S. investment income account, often cited as evidence of  “exorbitant privilege,” is receding. It already goes away without the income from profit-shifting by U.S. multinationals.

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China
What a Difference a Week (or a Weekend) Makes
Whither the yuan.
Blog Post by Brad W. Setser May 10, 2019 Follow the Money
Turkey
Turkey’s Stretched Public Banks…
Watch the banking system's acces to lira funding as Turks shift toward foreign currency deposits...
Blog Post by Brad W. Setser May 7, 2019 Follow the Money
China
China Never Stopped Managing its Trade
So long as the bulk of China's imports from the United States (and many others) are bought by state firms, China has the ability to manage its trade. The management isn't new. What's new is Trump's implicit willingness to accept managed trade so long as the trade is managed in a way that is judged to help the United States.
Blog Post by Brad W. Setser May 2, 2019 Follow the Money
  • China
    China's Coming Current Account Deficit?
    Any economy that saves 45 percent of GDP will tend to run a current account surplus, China included. Keeping its current account surplus down takes extraordinary (though largely off-budget) fiscal effort. And faster financial account liberalization almost certainly would result in a depreciation and push China back toward surplus.
    Blog Post by Brad W. Setser April 4, 2019 Follow the Money
  • United States
    When Tax Drives the Trade Data
    The pharmaceutical industry's tax strategies appear to have a large impact on the trade data. There isn't any other obvious explanation for why the (goods) deficit in pharmaceuticals exceeds the surplus in civil aircraft..
    Blog Post by Brad W. Setser March 26, 2019 Follow the Money