Some U.S. multinational enterprises, as a tax minimization strategy, shift profits to affiliates outside of the United States. We use formulary apportionment to reattribute multinational profits among the entities in the firm in a way that is consistent with each entity's economic activity. In the figure above, we plot the aggregate increase in U.S. GDP implied by our calculations. Since 2005, the adjustment adds an average $250 billion per year to U.S. GDP. We discuss the implications of offshore profit shifting for U.S. productivity in "Offshore Profit Shifting and Domestic Productivity Measurement."
I am an associate professor of economics at Pennsylvania State University and a research associate at the National Bureau of Economic Research. My research focuses on international economics, models of firm heterogeneity, and national income accounting (Google Scholar // IDEAS). I hold a B.S. in Economics from Bowling Green State University and a Ph.D. in Economics from the University of Minnesota.
I am also a special sworn employee of the Bureau of Economic Analysis, where I study the ways that multinational firms produce and sell goods and services around the world.
I am an associate editor of Economics Letters, the International Economic Review, and the Review of Economic Dynamics. I organize the Atlanta International Workshop with Federico Mandelman and Vivian Yue (2017 // 2016 // 2015 // 2014 // 2013 // 2012).