 ‘Dark matter’ in the external sector of the United StatesEconomics and Business Review, 2019, vol. 5, issue 2, 86-108 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. Keywords: international finance; balance of payments; income account; international investment position; ‘dark matter’ hypothesis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:vrs:ecobur:v:5:y:2019:i:2:p:86-108:n:5 Access Statistics for this article Economics and Business Review is currently edited by Tadeusz Kowalski More articles in Economics and Business Review from Sciendo |
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