Improving the <i>SNA</i> Treatment of Multinational Enterprises

Rassier, Dylan G.

doi:10.1111/roiw.12323

Cited by 4 publications

(2 citation statements)

References 23 publications

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“…Business groups and supply chain networks are believed to be increasingly organizing their affairs so as to maximize the wealth of their owners. They are believed to do this partly by choosing to locate, or anyway by declaring the locations of, their activities so as to minimize their tax burdens (Morck and Nakamura, 2007;Morck, 2011;Edens et al, 2015;Rassier, 2015).…”

Section: The Urgent Need As Well For a System Of Global Corporations mentioning

confidence: 99%

The System of National Accounts and Alternative Economic Perspectives

Nakamura¹,

Nakamura²

2015

Working Paper (Federal Reserve Bank of Philadelphia)

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Brent Moulton and Nicole Mayerhauser (2015) point out that, for more than 50 years, economists have featured the concept of human capital in their models of labor, growth, productivity, and distribution of income. We recommend the addition to the System of National Accounts (SNA) of supplemental person-level accounts: i.e., a System of Person Accounts (SPA). We see this as the best way of recognizing the processes of human capital creation as well as related issues of how income is distributed among individuals and families. We argue that this change would support three different perspectives from which economic activity can be viewed: (1) a current period outcomes perspective, (2) a risky possibilities perspective, and (3) a resources perspective. Moreover, these gains could be realized without changing the SNA in any substantial respects.

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Section: The Urgent Need As Well For a System Of Global Corporations mentioning

confidence: 99%

The System of National Accounts and Alternative Economic Perspectives

Nakamura¹,

Nakamura²

2015

Working Paper (Federal Reserve Bank of Philadelphia)

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“…We limit the scope of adjustments to U.S. MNEs because complete data are not available for foreign MNEs operating in the United States. Consistent with Guvenen et al (2017), 5 See, for example, Lipsey (2010), Rassier (2017), andUnited Nations et al (2011). 6 Other studies that consider possible measurement explanations for the recent productivity slowdown include Brynjolfsson and McAfee (2011), Byrne, Fernald, and Reinsdorf (2016), Byrne, Oliner and Sichel (2015), Mokyr (2014), and Syverson (2017).…”

Section: Introductionmentioning

confidence: 99%

Multinational Profit Shifting and Measures throughout Economic Accounts

Bruner¹,

Rassier²,

Ruhl³

2018

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Profit shifting to low-tax countries imposes challenges for the treatment of multinational enterprises in economic accounts. Using adjustments for profit shifting calculated in Guvenen et al. (2017) under an alternative measurement methodology, this paper empirically demonstrates how the effects of profit shifting cascade throughout a fully articulated set of economic accounts for the United States in 2014. We find a 1.5 percent and 3.5 percent increase in measured U.S. gross domestic product and operating surplus, respectively, and a 33.5 percent decrease in measured income receivable from the rest of world. As a result of offsetting effects, measured U.S. gross national saving decreases by 0.8 percent, and national borrowing increases by 6.9 percent. There are also potentially significant implications for analytic uses of the measures, including decreases for the labor share of income and the return on U.S. direct investment abroad and increases for the trade in services balance and the return on domestic non-financial business.

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Offshore Profit Shifting and Aggregate Measurement: Balance of Payments, Foreign Investment, Productivity, and the Labor Share

Guvenen

Mataloni

Rassier

et al. 2022

American Economic Review

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We show how offshore profit shifting by US multinational enterprises affects several key measures of the US economy. Profits shifted out of the United States grew rapidly from the mid-1990s to 2010 and have since waned. From 1982–2016, on average, 38 percent of income attributed to US direct investment abroad is reattributable to the United States. We find that adjusting for profit shifting shrinks the trade deficit, decreases the return on US foreign direct investment abroad, boosts productivity growth rates in the late 1990s and early 2000s, and lowers labor’s share of income. (JEL E23, E25, F14, F23, H25, H87, L25)

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Improving the SNA Treatment of Multinational Enterprises

Cited by 4 publications

References 23 publications

The System of National Accounts and Alternative Economic Perspectives

The System of National Accounts and Alternative Economic Perspectives

Multinational Profit Shifting and Measures throughout Economic Accounts

Offshore Profit Shifting and Aggregate Measurement: Balance of Payments, Foreign Investment, Productivity, and the Labor Share

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