ARTICLE
DOI: 10.3232/GCG.2007.V1.N1.02
From surpluses to deficits: the effect of dark matter on Latin America . Ricardo Hausmann - Federic Sturzenegger - [ Application ]
In previous work we have defined “dark matter” as the difference between the capitalized value of net investment income of a country and the official measure of its net foreign assets. In this paper we estimate dark matter assets for Latin American countries. We find that official current account dynamics follow reasonably well the evolution of dark matter inclusive net foreign assets in the region over relatively long periods such as the last two decades. However in the period 2002-2004 official statistics suggest a current account surplus that becomes a deficit of close to 300 billion once dark matter is included. This happens because official numbers underestimate current account imbalances for commodity producers who experienced significant capital losses as a result of the recent commodity boom.
Authors
Ricardo Hausmann
Harvard University
Federic Sturzenegger
Harvard University and Universidad Torcuato Di Tella
Comments (0)
Send
