The missing wealth of nations: Are Europe and the U.S. net debtors or net creditors?
AbstractThis paper shows that official statistics substantially underestimate the net foreign asset positions of rich countries because they fail to capture most of the assets held by households in offshore tax havens. Drawing on systematic anomalies in portfolio investment positions and a unique Swiss dataset, I find that 8% of the global financial wealth of households is held in tax havens, 6% of which goes unrecorded. On the basis of plausible assumptions, accounting for unrecorded assets turns the eurozone, officially the world's second largest net debtor, into a net creditor. It also reduces the U.S. net debt significantly. The results shed new light on global imbalances and challenge the widespread view that, after a decade of poor-to-rich capital flows, external assets are now in poor countries and debts in rich countries. I provide concrete proposals to improve international investment statistics.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HAL in its series PSE Working Papers with number halshs-00565224.
Date of creation: Mar 2012
Date of revision:
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00565224
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/
Tax havens ; International investment positions ; Global imbalances;
Other versions of this item:
- Gabriel Zucman, 2013. "The Missing Wealth of Nations: Are Europe and the U.S. net Debtors or net Creditors?," The Quarterly Journal of Economics, Oxford University Press, vol. 128(3), pages 1321-1364.
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-02-19 (Accounting & Auditing)
- NEP-ALL-2011-02-19 (All new papers)
- NEP-CBA-2011-02-19 (Central Banking)
- NEP-CIS-2011-02-19 (Confederation of Independent States)
- NEP-OPM-2011-02-19 (Open Economy Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gian-Maria Milesi-Ferretti & Natalia T. Tamirisa & Francesco Strobbe, 2010. "Bilateral Financial Linkages and Global Imbalances," IMF Working Papers 10/257, International Monetary Fund.
- Johannesen, Niels, 2014.
"Tax evasion and Swiss bank deposits,"
Journal of Public Economics,
Elsevier, vol. 111(C), pages 46-62.
- Clausing, Kimberly A., 2013. "Who Pays The Corporate Tax In A Global Economy?," National Tax Journal, National Tax Association, vol. 66(1), pages 151-84, March.
- Kohler, Pierre, 2014. "Asset-Centred Redistributive Policies for Sustainable Development," MPRA Paper 55357, University Library of Munich, Germany.
- Heshmati, Almas & Kim, Jungsuk, 2014. "A Survey of the Role of Fiscal Policy in Addressing Income Inequality, Poverty Reduction and Inclusive Growth," IZA Discussion Papers 8119, Institute for the Study of Labor (IZA).
- Philip R. Lane, 2011. "The Dynamics of Ireland?s Net External Position," The Institute for International Integration Studies Discussion Paper Series iiisdp388, IIIS.
- Bridgman, Benjamin, 2014. "Do intangible assets explain high U.S. foreign direct investment returns?," Journal of Macroeconomics, Elsevier, vol. 40(C), pages 159-171.
- Jørgen Juel Andersen & Niels Johannesen & David Dreyer Lassen & Elena Paltseva, 2013.
"Petro Rents, Political Institutions, and Hidden Wealth: Evidence from Bank Deposits in Tax Havens,"
0016, Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School.
- Jørgen Juel Andersen & Niels Johannesen & David Dreyer Lassen & Elena Paltseva, 2013. "Petro Rents, Political Institutions, and Hidden Wealth: Evidence from Bank Deposits in Tax Havens," EPRU Working Paper Series 2013-03, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
- Pierre-Olivier Gourinchas & Hélène Rey, 2013.
"External Adjustment, Global Imbalances and Valuation Effects,"
NBER Working Papers
19240, National Bureau of Economic Research, Inc.
- Gourinchas, Pierre-Olivier & Rey, Hélène, 2013. "External Adjustment, Global Imbalances and Valuation Effects," CEPR Discussion Papers 9566, C.E.P.R. Discussion Papers.
- Valeria Pellegrini & Enrico Tosti, 2012. "In search of lost capital: an estimation of undeclared portfolio assets," Questioni di Economia e Finanza (Occasional Papers) 131, Bank of Italy, Economic Research and International Relations Area.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).
If references are entirely missing, you can add them using this form.