Multinational Profit Shifting and Measures throughout Economic Accounts

Jennifer Bruner, Dylan G. Rassier and Kim Ruhl

No 24915, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Profit shifting to low-tax countries imposes challenges for the treatment of multinational enterprises in economic accounts. Using adjustments for profit shifting calculated in Guvenen et al. (2017) under an alternative measurement methodology, this paper empirically demonstrates how the effects of profit shifting cascade throughout a fully articulated set of economic accounts for the United States in 2014. We find a 1.5 percent and 3.5 percent increase in measured U.S. gross domestic product and operating surplus, respectively, and a 33.5 percent decrease in measured income receivable from the rest of world. As a result of offsetting effects, measured U.S. gross national saving decreases by 0.8 percent, and national borrowing increases by 6.9 percent. There are also potentially significant implications for analytic uses of the measures, including decreases for the labor share of income and the return on U.S. direct investment abroad and increases for the trade in services balance and the return on domestic non-financial business.

JEL-codes: E01 F23 F60 H26 (search for similar items in EconPapers)
Date: 2018-08
New Economics Papers: this item is included in nep-acc and nep-mac
Note: EFG IFM ITI
References: Add references at CitEc
Citations: View citations in EconPapers (21)

Published as Multinational Profit Shifting and Measures throughout Economic Accounts , Jennifer Bruner, Dylan G. Rassier, Kim J. Ruhl. in Challenges of Globalization in the Measurement of National Accounts , Ahmad, Moulton, Richardson, and van de Ven. 2023

Downloads: (external link)
http://www.nber.org/papers/w24915.pdf (application/pdf)

Related works:
Chapter: Multinational Profit Shifting and Measures throughout Economic Accounts (2018)
Working Paper: Multinational Profit Shifting and Measures throughout Economic Accounts (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:24915

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w24915

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by (wpc@nber.org).