Arbeitspapier

Retained earnings and foreign portfolio ownership: Implications for the current account debate

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In some countries, a sizable fraction of savings is derived from corporate savings. Although larger, traded corporations are often co-owned by foreign portfolio investors, current international accounting standards allocate all corporate savings to the host country. This paper suggests a framework to correct for this misleading attribution and applies this concept to Germany. For the years 2012 to 2020, our corrections retrospectively reduce German savings and consequently the German current account surplus by, on average, €11.5bn annually. This amounts to approximately five percent of Germany's average official current account surplus (€226.6bn) across these years.

Sprache
Englisch

Erschienen in
Series: SAFE Working Paper ; No. 389

Klassifikation
Wirtschaft
Current Account Adjustment; Short-term Capital Movements
Macroeconomics: Consumption; Saving; Wealth
Thema
current account
balance of payments
corporate savings
retained earnings
foreign portfolio investment
Germany

Ereignis
Geistige Schöpfung
(wer)
Goldbach, Stefan
Harms, Philipp
Jochem, Axel
Nitsch, Volker
Weichenrieder, Alfons J.
Ereignis
Veröffentlichung
(wer)
Leibniz Institute for Financial Research SAFE
(wo)
Frankfurt a. M.
(wann)
2023

DOI
doi:10.2139/ssrn.4465838
Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Goldbach, Stefan
  • Harms, Philipp
  • Jochem, Axel
  • Nitsch, Volker
  • Weichenrieder, Alfons J.
  • Leibniz Institute for Financial Research SAFE

Entstanden

  • 2023

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