There have been a number of recent news articles and working papers about the current account balance being either understated or overstated. What’s the issue and who’s right?
• BEA’s balance of payments account estimates are based on international statistical standards. • A number of recent news articles and working papers have suggested alternate ways of measuring the U.S. current account. Dark matter proponents argue that U.S. exports are understated because they exclude implicit transfers of knowledge by U.S. direct investors to their foreign affiliates for which there is no charge. Others have recently argued that U.S. receipts of income included in the current account are overstated, due to the inclusion of reinvested earnings in direct investment income. • It is important to note that these alternate views of the U.S. current account are not consistent with existing or proposed new international statistical standards, they each raise a number of conceptual problems, and some of them contain inaccurate statements about BEA’s methodologies or international statistical standards. For example: Some have suggested a possible double-counting in BEA’s method
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