Blogs

Follow the Money

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

Latest Post

The Dollar’s Global Role and the Financing of the U.S. External Deficit

There is too much talk about the dollar’s role as a reserve currency and too little talk about expectations of exceptional returns. Reserve accumulation hasn’t driven the financing of the U.S. current account deficit in recent years.

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Europe
Will Europe Stand Up to U.S. Tariff Threats?
How should Europe respond to the threat of 50 percent tariffs?
China
The (Somewhat) Mysterious Surge in China’s Current Account Surplus
China's trade surplus is rising.  China's reported current account surplus is rising even faster.  
Economics
Why Didn’t Tariffs Push up the U.S. Dollar?
Tariffs were supposed to push the dollar up. What happened?
  • China
    The Evolution of Global Trade in 2024
    A rebound in U.S. consumer imports fueled global trade, while Chinese import growth diverged from China’s export growth. Importers imported more, exporters exported more, and imbalances expanded.
  • Economics
    American Pharmaceutical Companies Still Aren’t Paying Tax in the U.S.
    The 2024 10-K reports of America’s largest pharmaceutical companies show that they continue to avoid paying much, if any, U.S. corporate income tax.
  • China
    The iPhone, the IMF, and China’s Balance of Payments
    The iPhone is priced correctly in China’s customs trade data. A seemingly banal observation that leads to big questions about China’s post 2022 balance of payments methodology. 
  • China
    Xi is Making the World Pay for China’s Mistakes
    My recent essay in the New York Times argues that China’s rising surplus in manufactures is a real threat to the global economy. 
  • China
    China’s FX Playbook: December 2024
    This is this first blog in an ongoing series which will provide a monthly look at the various indicators of China’s foreign exchange management.
  • China
    China’s Stunning 2024 Export Growth
    Chinese exports are growing much faster in volume than in dollar terms. Europe is losing out.
  • China
    Will China Take Over the Global Auto Industry?
    China’s electric vehicle capacity will soon match total Chinese domestic auto demand, and total Chinese auto production capacity is already over half of total global auto demand.