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Follow the Money

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

Latest Post

Slouching Toward Phase One

On current trends, goods exports to China will struggle to reach their 2017 level—there won't be any big gains from the Phase One deal. Read More

Argentina
The State of Argentina’s Debt Restructuring…
When a majority isn’t a majority…
Emerging Markets
What Role Should the IMF Play in Responding to COVID-19?
Right now the bulk of the IMF's lending capacity likely won't be used in the face of the economic, financial, and public health shock from COVID-19. Mobilizing the IMF's lending capacity likely will require a new facility. The Short-term Liquidity Line created this spring isn't actually well suited for the moment.
United States
Did the Dollar's Position as the Leading Reserve Currency Help Hold Treasury Yields Down This Spring?
Foreign Treasury sales, including large sales from reserve managers, made the Fed's job harder, not easier, in March.
  • United States
    The Irish Shock to U.S. Manufacturing?
     Over the last fifteen years, U.S. production of pharmaceuticals has fallen while imports have soared. It is worth asking why.   
  • United States
    Five Points about U.S. Trade Over the Last Thirty Years
    A few things that jumped out at me about the U.S. trade data. Some no doubt are controversial. 
  • Turkey
    Turkey Shows the Value of Balance Sheet Analysis
    Selling reserves borrowed from the banks ultimately puts the health of Turkey's banks at risk.
  • Ireland
    Ireland Really Shouldn't be Driving the Details of the Euro Area's GDP Data
    The euro area GDP data—thanks to Ireland—is increasingly telling us more about the tax strategies of large U.S. firms and less about the actual composition of activity in the euro area. Large investments in acquisition of their own intellectual property by U.S. firms transforming themselves into tax residents of Ireland ahead of the end of the double Irish are impacting the economic data of the entire currency union.
  • Trade
    When the Services Trade Data Tells You More About Tax Avoidance Than About Actual Trade…
    In theory, there is a strong case for trade in services—specialization raises the productivity of all. Yet the actual data on U.S. trade in services tells a less appealing story. Far too much trade in high end services seems to be with low tax jurisdictions. I love the Irish, but there is something wrong when “Ireland“ is the United States’ leading export market for software services, business consulting services, and R&D services.
  • China
    Looking Back at China's 2019 Balance of Payments Data
    Trump's trade war didn't really put a dent in China's balance of payments. And China looks like it has the kind of external balance sheet needed to weather the corona virus shock. China has a lot of domestic debt, but it remains a pretty big global creditor.
  • China
    How Effective Have China’s Agricultural and Seafood Tariffs Been?
    There is a case that viruses (bird flu, swine fever, and now the coronavirus) have had almost as big an impact on Chinese-American agricultural trade as the trade war. (And more than most want to know on trade in crustaceans)