About the Expert
Expert Bio
Brad W. Setser is the Steven A. Tananbaum senior fellow for international economics at the Council on Foreign Relations. His expertise includes macroeconomics, global capital flows, financial vulnerability analysis, sovereign debt restructuring, and the management of financial crises. He regularly blogs at Follow the Money.
Setser served as the deputy assistant secretary for international economic analysis in the U.S. Treasury from 2011 to 2015, where he worked on Europe’s financial crisis, currency policy, financial sanctions, commodity shocks, and Puerto Rico’s debt crisis. He was previously the director for international economics, serving jointly on the staff of the National Economic Council and the National Security Council.
He is the author of Sovereign Wealth and Sovereign Power (CFR, 2008) and the coauthor, with Nouriel Roubini, of Bailouts and Bail-ins: Responding to Financial Crises in Emerging Economies (Peterson Institute, 2004), which draws lessons from emerging market financial crises between 1995 and 2003. His work has been published in Foreign Affairs, Finance and Development, Global Governance and Georgetown Journal of International Law, among others.
Setser was an international affairs fellow at the Council on Foreign Relations in 2003, and a fellow from 2007 to 2009. He also has been the director of global research for Roubini Global Economics and a visiting scholar at the International Monetary Fund. He holds a BA from Harvard University, a masters from Sciences-Po, and an MA and PhD in international relations from Oxford University.
Affiliations:
- Exante Data, senior advisor
Featured
An analysis of revenue projections for the proposed border adjustment tax.
The best single measure of the resilience of an oil- or gas-exporting economy in the face of swings in the global oil price is its external breakeven price: the oil price that covers its import bill.
Current Projects
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Large increases in dollar reserves tend to come during periods of dollar weakness, not periods of dollar strength. That is for a simple reason: many export-heavy countries still intervene heavily in the foreign currency market to try to keep their own currencies from appreciating against the dollar. Until Asia is as willing to float up as it is to float down, the dollar isn't going anywhere as a reserve currency.
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On current trends, goods exports to China will struggle to reach their 2017 level—there won't be any big gains from the Phase One deal.
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Right now the bulk of the IMF's lending capacity likely won't be used in the face of the economic, financial, and public health shock from COVID-19. Mobilizing the IMF's lending capacity likely will require a new facility. The Short-term Liquidity Line created this spring isn't actually well suited for the moment.
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Foreign Treasury sales, including large sales from reserve managers, made the Fed's job harder, not easier, in March.
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Over the last fifteen years, U.S. production of pharmaceuticals has fallen while imports have soared. It is worth asking why.
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A few things that jumped out at me about the U.S. trade data. Some no doubt are controversial.
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Selling reserves borrowed from the banks ultimately puts the health of Turkey's banks at risk.
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The euro area GDP data—thanks to Ireland—is increasingly telling us more about the tax strategies of large U.S. firms and less about the actual composition of activity in the euro area. Large investments in acquisition of their own intellectual property by U.S. firms transforming themselves into tax residents of Ireland ahead of the end of the double Irish are impacting the economic data of the entire currency union.
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In theory, there is a strong case for trade in services—specialization raises the productivity of all. Yet the actual data on U.S. trade in services tells a less appealing story. Far too much trade in high end services seems to be with low tax jurisdictions. I love the Irish, but there is something wrong when “Ireland“ is the United States’ leading export market for software services, business consulting services, and R&D services.
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Trump's trade war didn't really put a dent in China's balance of payments. And China looks like it has the kind of external balance sheet needed to weather the corona virus shock. China has a lot of domestic debt, but it remains a pretty big global creditor.
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There is a case that viruses (bird flu, swine fever, and now the coronavirus) have had almost as big an impact on Chinese-American agricultural trade as the trade war. (And more than most want to know on trade in crustaceans)
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The common denominator across many emerging economies is a shortage of dollars. But the causes differ, as do the solutions.
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China needs its own version of Rutger Bregman …
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There is a global scramble for dollars going on. It needs to be addressed through creative policies.
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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.
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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.
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Lebanon is in a deep financial hole, with no obvious way out.
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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.
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How much tax supported debt will Puerto Rico be left with if the Board's most recent proposal is accepted by the courts?
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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 GDP—net exports and domestic demand—have been contaminated by tax driven transactions that don't reflect real economic activity.
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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.