<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The aim of this paper is to examine the ‘dark matter’ assets in the external sector of the United States in the period 1999:Q1-2018:Q3. The paper investigates data on the balance of payments and international investment position for the US and a group of 18 economies. The research reveals that the US is a privileged economy with respect to foreign income on international investments. The rates of return on its foreign assets are relatively higher, and the costs incurred on its foreign liabilities relatively lower, as compared with the benchmark group. This special privilege of the US relates to equity investments, especially foreign direct investments. Based on prevailing income differentials substantial ‘dark matter’ assets of the US are estimated. Recognising such ‘dark matter’ leads to the conclusion that the US is a foreign creditor, not debtor. The findings shed light on the puzzle as to why the US has a continuing ability to sustain its external position despite mounting foreign liabilities.</p></abstract>

The aim of this paper is to examine the ‘dark matter’ assets in the external sector of the United States in the period 1999:Q1-2018:Q3. The paper investigates data on the balance of payments and international investment position for the US and a group of 18 economies. The research reveals that the US is a privileged economy with respect to foreign income on international investments. The rates of return on its foreign assets are relatively higher, and the costs incurred on its foreign liabilities relatively lower, as compared with the benchmark group. This special privilege of the US relates to equity investments, especially foreign direct investments. Based on prevailing income differentials substantial ‘dark matter’ assets of the US are estimated. Recognising such ‘dark matter’ leads to the conclusion that the US is a foreign creditor, not debtor. The findings shed light on the puzzle as to why the US has a continuing ability to sustain its external position despite mounting foreign liabilities.

‘Dark matter’ in the external sector of the United States

Department of International Finance, Faculty of International Business and Economics

Poznań University of Economics and Business

Economics and Business Review

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"\u2018Dark matter\u2019 in the external sector of the United States"}

The aim of this paper is to examine the ‘dark matter’ assets in the external sector of the United States in the period 1999:Q1-2018:Q3. The paper investigates...

‘Dark matter’ in the external sector of the United States

Published Online: Jul 09, 2019

Page range: 86 - 108

Received: Jan 11, 2019

Accepted: Apr 10, 2019

DOI: https://doi.org/10.18559/ebr.2019.2.5

Keywords
international finance, balance of payments, income account, international investment position, ‘dark matter’ hypothesis

© 2019 Konrad Sobański, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

‘Dark matter’ in the external sector of the United States

Published Online: Jul 09, 2019

Page range: 86 - 108

Received: Jan 11, 2019

Accepted: Apr 10, 2019

DOI: https://doi.org/10.18559/ebr.2019.2.5

Keywordsinternational finance, balance of payments, income account, international investment position, ‘dark matter’ hypothesis

© 2019 Konrad Sobański, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
international finance, balance of payments, income account, international investment position, ‘dark matter’ hypothesis