The changing nature of the U.S. balance of payments

RePEc Short ID: pti5
ORCID iD: 0000-0002-5939-2155

Hellerstein, Rebecca; Tille, Cédric

Journal Article

The changing nature of the U.S. balance of payments

Abstract: Earnings on cross-border investments figure only marginally in net estimates of the U.S. current account, but they represent an increasingly large share of gross flows between the United States and other nations. Because these earnings fluctuate much more sharply than trade flows, they can be expected to create permanently higher current account volatility. Such increased volatility is not necessarily grounds for concern, however; it reflects an international sharing of risk that provides a buffer against domestic economic uncertainty.

Keywords: Investments, Foreign; International economic relations; Balance of payments;