Global imbalances or bad accounting ? The missing dark matter in the wealth of nations

@inproceedings{Hausmann2006GlobalIO,
  title={Global imbalances or bad accounting ? The missing dark matter in the wealth of nations},
  author={Ricardo Hausmann and Federico Sturzenegger},
  year={2006}
}
This paper argues that current account statistics may provide a poor indication for the real evolution of a country’s net foreign assets. The differences may arise due to mismeasurement of FDI, as well as from unreported trade of insurance or liquidity services across countries. We suggest estimating net foreign assets by capitalizing the service flow and estimating the current account from the changes in this stock of foreign assets. We call dark matter the difference between our measure of… CONTINUE READING

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