Follow the Money

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

Latest Post


I am stepping down from my position at the Council of Foreign Relations to take a new job. That, among other things, means that I will not be blogging here for the foreseeable future. Read More

Currency Reserves
It Is Time To Scrap the IMF's Reserve Adequacy Metric
The IMF reserve metric isn't working: it is failing to differentiate between obviously under-reserved countries like Turkey and Argentina and adequately reserved countries like China.
The Changing Nature of Turkey’s Balance Sheet Risks
Pay attention to banking system's foreign currency exposure to the government ...
China’s Surplus is Rising Rapidly. So is the U.S. Deficit. The IMF Cannot Turn a Blind Eye.
Do not use the IMF’s current account forecast in the Fall 2020 World Economic Outlook (WEO). It is already out of date.     
  • Emerging Economies
    Reframing the Collective Action Problem in Sovereign Bond Restructuring
    A recent white paper from Lazard points out that emerging market sovereign bond holdings are often fairly concentrated among a handful of big players.  The main impediment to collective action may be less that bond holders are dispersed, and more that a handful of big holders all compete against each other and the benchmark.
  • China
    Record Chinese Bilateral Surpluses With the United States Are Not Mirrored in the U.S. Trade Data
    Is China’s surplus with the United States back at a record level? It depends. In China’s data, China’s exports to the United States and its surplus with the United States are at all-time highs. The United States’ import data, however, shows fewer imports from China than China reports exports—which is interesting, because the norm has long been the other way around.
  • China
    Chasing Shadows in China’s Balance of Payments Data
    China’s second quarter balance of payments data points to a significant increase in the foreign asset accumulation of the state banking system. That at least raises the question of whether China’s authorities are resisting pressure on the yuan to appreciate.
  • Currency Reserves
    Asian Intervention in the Foreign Exchange Market is Back. Bigly.
    Joe Gagnon and Fred Bergsten have called the years from 2003 to 2013 the decade of manipulation, as a host of Asian countries protected their competitive position of their exporters by intervening massively in the foreign exchange market. Is a new decade of manipulation about to start, as Asian exporters once again try to keep their currencies from rising? 
  • Trade
    The Return of Big Chinese Surpluses (And Large U.S. Deficits)
    Global trade imbalances are, once again, largely the result of Chinese and American trade imbalances. China's surplus has increased even as the pandemic has reduced global trade, as has the U.S. deficit.
  • United States
    Could Trade Agreements Help Limit Tax Competition?
    There is, now, I hope a growing recognition that tax avoidance has a significant impact on the structure of global supply chains—some “supply” chains also function as tax chains, with transfer pricin…
  • Trade
    Falling Trade, Rising Imbalances...
    If nothing changes, China’s massive trade surplus will soon be an even bigger political and economic issue…as global trade imbalances are once again being made in China.