TITLE

The Valuation of Hidden Assets in Foreign Transactions: Why "Dark Matter" Matters

AUTHOR(S)
Hausmann, Ricardo; Sturzenegger, Federico
PUB. DATE
January 2007
SOURCE
Business Economics;Jan2007, Vol. 42 Issue 1, p28
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This paper clarifies how the valuation of hidden assets--what we call "dark matter"--changes our assessment of the U.S. external imbalance. Dark matter assets are defined as the capitalized value of the return privilege obtained by U.S. assets. Because this return privilege has been steady over recent decades, it is likely to persist in the future or even to increase, as it becomes leveraged by an increasingly globalized world. Once this is included in future projections of U.S. current accounts, the U.S. external position looks much more balanced than depicted in official statistics.
ACCESSION #
24551574

 

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