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Follow the Money

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

Latest Post

China's Coming Current Account Deficit?

The Economist—in a leader two weeks ago—argued that China is on the verge of shifting into a “structural” current account deficit and that, as a result, it is now safe for China to accelerate the liberalization of its financial account as part of a new push to “free” its financial system. I disagree on both counts. Read More

March 26, 2019

United States
When Tax Drives the Trade Data 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..

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March 25, 2019

Puerto Rico
Is There Still A Path that Returns Puerto Rico to Debt Sustainability? 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.

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March 15, 2019

China
The Fall in China's Current Account Surplus Was Not Replicated Across Asia 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.

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