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What Do We Really Know about the Transatlantic Current Account?

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  • Martin T. Braml
  • Gabriel J. Felbermayr

Abstract

Do the U.S. have a current account surplus or a deficit with the EU? Since 2009, official sources disagree: The U.S. Department of Commerce claims a consistent U.S. surplus while Eurostat reports the opposite. International transactions are notoriously difficult to measure accurately, but the size of the transatlantic discrepancy is extremely substantial: over the last ten years, it has grown to a cumulated 1 Trillion USD. In times of severe trade policy disagreements across the Atlantic, this gap is obviously problematic. This paper tries to dissect the transatlantic reporting gap. Two country-pairs – U.S.-UK and U.S.-Netherlands – account for almost the entire transatlantic discrepancy, which, in 2017, stood at about 180 billion USD. In the former case, national statistics on net services trade disagree by as much as 55 billion USD; in the latter case, there is a reporting difference in net primary income of about 60 billion USD. In contrast, data provided by the Bundesbank for the German-U.S. current account closely mirror U.S. data. Non-random measurement error and, possibly, deliberate manipulation seem to cause the observed discrepancies.

Suggested Citation

  • Martin T. Braml & Gabriel J. Felbermayr, 2019. "What Do We Really Know about the Transatlantic Current Account?," CESifo Working Paper Series 7802, CESifo.
    • Handle: RePEc:ces:ceswps:_7802
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    Cited by:

    1. Gabriel J. Felbermayr, 2020. "Transatlantische Handelspolitik vor, während und nach Trump," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 100(12), pages 908-913, December.
    2. Felbermayr, Gabriel & Yotov, Yoto V., 2021. "From theory to policy with gravitas: A solution to the mystery of the excess trade balances," European Economic Review, Elsevier, vol. 139(C).
    3. Felbermayr, Gabriel & Stamern, Vincent, 2021. "Transatlantischer Neustart: Vorschläge zur handelspolitischen Zusammenarbeit zwischen EU und USA," Studien, Stiftung Familienunternehmen / Foundation for Family Businesses, number 250014.
    4. Braml, Martin & Felbermayr, Gabriel, 2021. "Die USA sind mit großem Abstand Europas wichtigster Wirtschaftspartner," Kiel Policy Brief 150, Kiel Institute for the World Economy (IfW Kiel).
    5. Martin T. Braml & Gabriel J. Felbermayr, 2022. "The EU self-surplus puzzle: an indication of VAT fraud?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(5), pages 1075-1097, October.
    6. Henning Vöpel & Harms Bandholz & Gabriel Felbermayr & Christoph Spengel & Jost Heckemeyer & Martin Mosler & Niklas Potrafke & Henrik Müller & Gabriel J. Felbermayr, 2020. "Die USA vor dem Wahlkampf: Die Spuren Donald Trumps in Wirtschaft und Politik," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(01), pages 03-29, January.
    7. Felbermayr, Gabriel & Hinz, Julian & Langhammer, Rolf J., 2024. "US trade policy after 2024: What is at stake for Europe?," Kiel Policy Brief 178, Kiel Institute for the World Economy (IfW Kiel).
    8. Christian Grimme, 2020. "Zu den globalen Leistungsbilanzsalden im Jahr 2019," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(02), pages 49-53, February.
    9. Felbermayr, Gabriel & Stamern, Vincent, 2021. "Transatlantic restart: Proposals for trade cooperation between the EU and the United States," Studien, Stiftung Familienunternehmen / Foundation for Family Businesses, number 250017.

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    More about this item

    Keywords

    current account; statistical discrepancies; service trade; trade war;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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