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NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.
This report has been reviewed by a group other than the authors according to procedures approved by a Report Review Committee consisting of members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine.
This project was supported by funds from the Bureau of Economic Analysis of the U.S. Department of Commerce, the Federal Reserve Board, and the U.S. Department of State.
Library of Congress Cataloging-in-Publication Data
Kester, Anne Y.
Following the money: U.S. finance in the world economy / Anne Y. Kester and Panel on International Capital Transactions, Committee on National Statistics, Commission on Behavioral and Social Sciences and Education, National Research Council.
Includes bibliographical references and index.
1. Financial services industry—United States. 2. Capital movements—Data processing. 3. Automatic data collection systems. I. National Research Council (U.S.). Panel on International Capital Transactions. II. Title.
Copyright 1995 by the National Academy of Sciences. All rights reserved.
Printed in the United States of America.
PANEL ON INTERNATIONAL CAPITAL TRANSACTIONS
SAM Y. CROSS (Chair),
School of International and Public Affairs, Columbia University, New York
STEPHEN H. AXILROD,
Nikko Securities International, Inc., New York
RICHARD N. COOPER,
Department of Economics, Harvard University
DAVID T. DEVLIN,
Citibank, New York
RIMMER DE VRIES,
Morgan Guaranty Trust Co., New York
JEFFREY A. FRANKEL,
Department of Economics, University of California, Berkeley
EDWARD I. GEORGE,
Department of Management Science and Information Systems, University of Texas, Austin
JOHN G. HEIMANN,
Merrill Lynch and Co., New York
PETER B. KENEN,
Department of Economics, Princeton University
LAWRENCE R. KLEIN,
Department of Economics, University of Pennsylvania, Philadelphia
Consultant, Washington, D.C.
Brookings Institution, Washington, D.C.
J. MICHAEL STEELE,
Statistics Department, University of Pennsylvania
NANCY H. TEETERS,
IBM Corporation, Armonk, New York (retired)
LAWRENCE A. THIBODEAU,
Price Waterhouse, Washington, D.C.
H. DAVID WILLEY,
Morgan Stanley & Co., New York
ANNE Y. KESTER, Study Director
COURTENAY SLATER, Consultant
ROBERT F. GEMMILL, Technical Adviser
ROBERT L. SAMMONS, Technical Adviser
CANDICE S. EVANS, Project Assistant
ELIZABETH M. HUFFMAN, Project Assistant
COMMITTEE ON NATIONAL STATISTICS 1992-1993
BURTON H. SINGER (Chair),
Office of Population Research, Princeton University
NORMAN M. BRADBURN (Vice Chair),
National Opinion Research Center, University of Chicago
MARTIN H. DAVID,
Department of Economics, University of Wisconsin
JOHN F. GEWEKE,
Department of Economics, University of Minnesota, Minneapolis
Office of Population Research, Princeton University
Department of Mathematics, University of Southern California
JOEL B. GREENHOUSE,
Department of Statistics, Carnegie Mellon University
Department of Economics, University of Rochester
ROBERT M. HAUSER,
Department of Sociology, University of Wisconsin
JANET L. NORWOOD,
The Urban Institute, Washington, D.C.
DOROTHY P. RICE,
Department of Social and Behavioral Sciences, School of Nursing, University of California, San Francisco
JOHN E. ROLPH,
The RAND Corporation, Santa Monica, California
Westat, Inc., Rockville, Maryland
DANIEL L. SOLOMON,
Department of Statistics, North Carolina State University
MIRON L. STRAF, Director
This report on international capital transactions is the second from the Committee on National Statistics that considers issues of the U.S. economy in a global context. The first report, Behind the Numbers: U.S. Trade in the World Economy (Kester, 1992) resulted from a study undertaken in response to a recommendation by the Working Group on the Quality of Economic Statistics of the President's Economy Policy Council. That report assessed the adequacy of and recommended improvements for data on U.S. merchandise trade and international transactions in services. The report also noted the lack of information about international capital transactions and stressed that a fuller understanding of the U.S. position in the world economy could not be obtained without that information.
In response to that finding and with funds provided by the Bureau of Economic Analysis of the U.S. Department of Commerce, the committee in 1992 convened the Panel on International Capital Transactions to analyze what data are available and recommend improvements. Subsequent grants were received from the Federal Reserve Board and the U.S. Department of State.
Many people contributed to this report. First and foremost, of course, are the members of the panel. They worked hard to come to agreement on a wide-ranging set of recommendations to improve the nation's data on international capital transactions, although individual panel members may not necessarily agree with all of the analyses or discussions in the report.
The study would not have been possible without the unstinting efforts of Dr. Anne Y. Kester. Dr. Kester served as study director for the first panel on U.S. merchandise trade and international services and in a similar capacity for the Panel on International Capital Transactions. Dr. Kester deserves special recognition for developing the study, drafting the report, and contributing many of its original ideas. The committee joins the panel in expressing gratitude and appreciation for her outstanding work.
As time went on, the report had to be revised in order to incorporate many sets of new figures from BEA, acknowledge changes in some agency programs, and otherwise bring the report up to date. We asked Courtenay Slater, former chief economist in the Department of Commerce and a former member of the Committee on National Statistics, to help us. Thanks to her extensive assistance and hard work, the report has remained current. Additionally, John Kambhu, a research officer and senior economist at the Federal Reserve Bank of New York, provided much needed assistance in revising and strengthening our chapter on financial derivatives. We are indebted to him for his careful work.
In addition to the panel, staff, and consultants, many people contributed to the study by providing the panel with information and insights. We thank Robert Gemmill and Robert Sammons, who served as technical advisers; Christopher Bach, Betty Barker, Carol Carson, Anthony Dillulo, Steven Landefeld, Ann Lawson, Bill McCormick, Louis Moczar, and Allan Young of the Bureau of Economic Analysis; Douglas Carpenter, Peter Hooper, Russell Krueger, Lawrence Promisel, Gail Smith, Lois Stekler, Guy V.G. Stevens, and Edwin Truman of the Federal Reserve Board; Michael C. Egan of the U.S. Department of State; Akbar Akhtar, Terry Melford, Susan Moore, Beth Schwartzberg, and Monica Szemple of the Federal Reserve Bank of New York; Bill Griever, Sidney Jones, Gary Lee, and Ashby McCown of the U.S. Department of the Treasury; Gail Haas, John Lee, and Norman Nelson of the New York Clearing House; P. A. Bull, Phil Davis, Charles Enoch, Robert Heath, David I. W. Locke, D. M. H. Pennington, Colin Pettigrew, and Chris Taylor of the Bank of England; Bruce Buckingham of the Central Statistical Office of the United Kingdom; Rudolf Seiler of the Deutsche Bundesbank; Shinichi Yoshikuni of the Bank of Japan; Jack Bame, John McLenaghan, Michael Mussa, and John Wilson of the International Monetary Fund; and many others including Linda Bergen, Derek Hargreaves, and Peter Hancock of J.P. Morgan, Edward Bernstein, and Ralph C. Bryant of the Brookings Institution, Michael Boskin of the Council of Economic Advisors,
Jeffrey Carliner of the National Bureau of Economic Research, Robert DiClementi of Salomon Brothers, Inc., Bill Dobb of the International Swap Dealers Association, Ray Fitzgerald of Citicorp, Charles Taylor of the Group of Thirty, and the staff of the Financial Accounting Standards Board. We are also grateful to the many data users, filers, and compilers who responded to the panel's invitation for written comments.
The committee and panel also express their appreciation to Elizabeth M. Huffman for assisting the panel in so many ways, especially in the preparation of the manuscript for publication; to Candice S. Evans, who also assisted with the manuscript; and to Eugenia Grohman for editing and guiding the report through review and publication.
The committee thanks all of these people for what we believe is a major contribution to the statistical and policy issues in the rapidly evolving area of international capital transactions.
Burton H. Singer, Chair
Committee on National Statistics (1987-1993)
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