, 6 tweets, 2 min read
Saez and Zucman?

Nope. The IMF

"FDI transactions and positions recorded in the
balance of payments are often unrelated to greenfield
investment or mergers and acquisitions, but rather
reflect tax and regulatory optimization strategies by
large multinational corporations"
Box 1.2 in Chapter 1 of the WEO (by Gian Maria Milesi-Ferretti) is superb

imf.org/en/Publication…
I knew that the United States Tax Cuts and Jobs Act had resulted in a tax related reversal of US FDI flows (as companies repatriated funds stashed away, legally speaking, in low tax jurisdictions).

I didn't know it also reduced FDI inside the euro area.
But it turns out that after the tax reform US firms could unwind some of their European SPEs, which led to a big swing in recorded FDI in the Netherlands and Luxembourg!
the IMF again:

"As noted in DNB (2019) and BCL (2019), these
transactions reflect mostly operations by US-based
multinationals seeking to simplify their international
group structure by liquidating intermediate holdings, also in relation to the US tax reform of 2017"
The other boxes were also excellent (liked the one on global auto production) ...
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