Drug Trade and Statistical Discrepancies in the U.S. Balance of Payments

Mehdi Hojjat Hojjat

Abstract


This paper tests the hypothesis that residual values in balance of payment accounting are a random variable. Previous research in this area has been satisfied with an explanation that these residual values are just statistical discrepancies and are random in nature. This paper reveals a structural problem with the way balance of payment accounting has been set up and data are collected. The research proves that there is a positive bias about these values. Moreover, the research shows that there is a positive relationship between the size of the illicit drug market and the statistical discrepancies in the U.S. balance of payments.


Keywords


Balance of Payments;Drug Trade; Statistical Discrepancies; Balance of Payment Accounting

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References


U.S. Bureau of the Census (2014). Retrieved from http://www.census.gov/foreign-trade/statistics/historical/

Bureau of Economic Analysis (April 2011), Survey of Current Business, U.S. International Transactions. “In 2010, the statistical discrepancy was $235.1 billion, compared with $162.5 billion in 2009.”

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DOI: http://dx.doi.org/10.18533/ijbsr.v4i8.577

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International journal of business and social research (Print)
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