‘Dark matter’ in the external sector of the United States

Konrad Sobański

Abstract

The aim of this paper is to examine the ‘dark matter’ assets in the external sector of the United States in the period 1999:Q1-2018:Q3. The paper investigates data on the balance of payments and international investment position for the US and a group of 18 economies. The research reveals that the US is a privileged economy with respect to foreign income on international investments. The rates of return on its foreign assets are relatively higher, and the costs incurred on its foreign liabilities relatively lower, as compared with the benchmark group. This special privilege of the US relates to equity investments, especially foreign direct investments. Based on prevailing income differentials substantial ‘dark matter’ assets of the US are estimated. Recognising such ‘dark matter’ leads to the conclusion that the US is a foreign creditor, not debtor. The findings shed light on the puzzle as to why the US has a continuing ability to sustain its external position despite mounting foreign liabilities.
Author Konrad Sobański (WGM / KFM)
Konrad Sobański,,
- Department of International Finance
Journal seriesEconomics and Business Review, [Poznan University of Economics Review], ISSN 2392-1641, e-ISSN 2450-0097, [1643-5877], (N/A 40 pkt)
Issue year2019
Vol5
No2
Pages86-108
Publication size in sheets1.1
Keywords in Polishfinanse międzynarodowe, bilans płatniczy, rachunek dochodów, międzynarodowa pozycja inwestycyjna, hipoteza „ciemnej materii”
Keywords in Englishinternational finance, balance of payments, income account, international investment position, ‘dark matter’ hypothesis
DOIDOI:10.18559/ebr.2019.2.5
URL http://www.ebr.edu.pl/pub/2019_2_86.pdf
Languageen angielski
Score (nominal)40
Score sourcejournalList
ScoreMinisterial score = 40.0, 06-04-2020, ArticleFromJournal
Publication indicators WoS Citations = 0
Citation count*2 (2020-06-22)
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