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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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Puerto Rico
Is There Still A Path that Returns Puerto Rico to Debt Sustainability?
The relatively generous settlement with the sales-tax backed bonds (COFINA) has reduced the funds available for everyone else.
Blog Post by Brad W. Setser March 25, 2019 Follow the Money
China
The Fall in China's Current Account Surplus Was Not Replicated Across Asia
China's surplus is down relative to its pre-global crisis level, both in dollar terms and as a percent of China's own GDP.    The same cannot be said of China's neighbors.   East and Southeast Asia are still a substantial exporters of savings to the rest of the world.
Blog Post by Brad W. Setser March 15, 2019 Follow the Money
China
Why China's Incomplete Macroeconomic Adjustment Makes China 2025 a Bigger Risk
How the fragile macro-economic base of China’s external adjustment could intersect with China 2025 and generate a new "China" shock.
Blog Post by Brad W. Setser March 14, 2019 Follow the Money
  • China
    Taking Managed Trade Seriously—What Would a Deal that Tries to Close the Bilateral Deficit Need to Look Like?
    If Trump wants to set targets for China’s imports, he should focus on its imports of manufactures—not on getting tweetable deliverables out of the soybeans and oil that China will import (from someone) no matter what…
    Blog Post by Brad W. Setser March 5, 2019 Follow the Money
  • Trade
    Soybeans!
    Global prices have converged, likely on the expectation of a trade deal with China. But the arbitrages that developed back when U.S. beans were selling at a discount are in some ways more interesting.
    Blog Post by Brad W. Setser February 25, 2019 Follow the Money