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Statistical Issues Related to Global Economic Imbalances: Perspectives on "Dark Matter"

Author

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  • Ralph H. Kozlow

    (Bureau of Economic Analysis)

Abstract

There has been a large amount of recent interest in how the U.S. can be the so-called world's largest debtor nation and at the same time have a persistent surplus on income in its balance of payments accounts. Based on BEA's published data, two factors explain the incongruence - a difference in the composition of U.S.-owned assets abroad compared to foreign-owned assets in the U.S., and a higher rate of return earned by U.S. investors on their overseas assets, particularly on direct investment, than the rate of return that foreign investors earn on similar classes of assets invested in the U.S. In contrast, some others have recently argued that the explanation for the incongruence is that U.S.-owned assets abroad are undervalued, mainly because large exports of intangible assets by U.S. direct investors to their foreign affiliates have gone undetected. This paper reviews the main points of this argument and discusses some of its implications.

Suggested Citation

  • Ralph H. Kozlow, 2006. "Statistical Issues Related to Global Economic Imbalances: Perspectives on "Dark Matter"," BEA Papers 0068, Bureau of Economic Analysis.
  • Handle: RePEc:bea:papers:0068
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    File URL: https://www.bea.gov/papers/pdf/darkmatter_10_2006.pdf
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Dark Matter or Base Erosion & Profit Shifting?
      by ProGrowthLiberal in EconoSpeak on 2015-05-02 21:22:00

    Citations

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    Cited by:

    1. Stephanie E. Curcuru & Charles P. Thomas & Francis E. Warnock, 2009. "Current Account Sustainability and Relative Reliability," NBER Chapters,in: NBER International Seminar on Macroeconomics 2008, pages 67-109 National Bureau of Economic Research, Inc.
    2. Alexandra Heath, 2007. "What explains the US net income balance?," BIS Working Papers 223, Bank for International Settlements.
    3. Daniel R. Yorgason, 2007. "Treatment of International Research and Development as Investment: Issues and Estimates," BEA Papers 0080, Bureau of Economic Analysis.

    More about this item

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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