Follow the Money

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

Latest Post

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. Read More

International Economic Policy
Addressing the Global Dollar Shortage: More Swap Lines? A New Fed Repo Facility for Central Banks? More IMF Lending?
There is a global scramble for dollars going on. It needs to be addressed through creative policies.
It Is Time for a Currency Manipulation Truce… Especially as Taiwan Disclosed Its True Foreign Exchange Position
There is no need for the Treasury to put out its foreign exchange report on time this April. There are other, more pressing priorities. And if it does, the Treasury should exercise its discretion to allow those countries that came close to meeting the definition of manipulation last year off the hook.
The U.S. Shock to Global Demand in Q4 (Before the Coronavirus)
The large fall in U.S. imports in Q4 slowed global growth, as weak U.S. demand hurt the rest of the world more than it hurt the United States.
  • Lebanon
    Lebanon’s Imminent Financial Crisis
    Lebanon is in a deep financial hole, with no obvious way out.
  • Trade
    Tax Games: Big Pharma Versus Big Tech
    American pharmaceutical companies are skilled at using transfer pricing to shift the profit on their U.S. sales out of the United States. That is why the United States' trade deficit in pharmaceuticals is now bigger than the United States' trade surplus in aircraft.
  • Puerto Rico
    What Exactly is in the New Agreement Between Puerto Rico's Board and its Creditors?
    How much tax supported debt will Puerto Rico be left with if the Board's most recent proposal is accepted by the courts?
  • China
    Lessons From Phase One of the Trade War With China
    With the phase one trade deal signed—and with China now promising (somewhat credibly in my view) to raise its imports of agriculture and energy above their pre-trade war levels and (less credibly) pr…
  • Economics
    Leprechaun Adjusted Euro Area GDP…
    The entire euro area's economic statistics now need to be adjusted to remove the distortions created by the tax transactions of large multinationals operating in Ireland and the Netherlands. Headline GDP numbers aren't too distorted, but the main components of GDPnet exports and domestic demandhave been contaminated by tax driven transactions that don't reflect real economic activity.
  • Taiwan
    All Sound and No Fury? Will The Trump Administration Get Tough on Currency in April?
    A number of Asian countries could be designated as manipulators in the U.S. Treasury's April foreign exchange report. And unlike the politically motivated designation of China last summer, there would be a clear analytical justification for a new round of designations.
  • China
    More Trade Destruction than Trade Diversion Right Now
    Earlier in the year, there was a plausible argument that Trump's tariffs were mostly just diverting U.S. demand to other markets. But in recent months imports from China and imports from the United States' other trade partners are both falling. And the fall in imports has brought the non-petrol trade deficit down significantly from its levels this summer, though perhaps not permanently.