The End of Privilege: A Reexamination of the Net Foreign Asset Position of the United States

Andrew Atkeson, Jonathan Heathcote and Fabrizio Perri

American Economic Review, 2025, vol. 115, issue 7, 2151-2206

Abstract: The US net foreign asset position declined sharply after 2007, reaching negative 60 percent of GDP by the third quarter of 2023. This deterioration primarily reflects a US-specific rise in corporate asset values that inflated the value of US equity liabilities to the rest of the world. To interpret these trends, we develop an international macro-finance model of flows, stocks, asset valuations, the current account,and the net foreign asset position. We find that the welfare impact of rising asset values for a representative US household has been quite negative given extensive foreign ownership of US corporate equity.

JEL-codes: F21 F32 F40 G15 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1257/aer.20230732

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