Sharecroppers or Shrewd Capitalists? Projections of the US Current Account, International Income Flows, and Net International Debt

John Kitchen ()

Review of International Economics, 2007, vol. 15, issue 5, 1036-1061

Abstract: This paper presents a detailed framework and analysis to address whether the US is on track to becoming a society of “sharecroppers,” paying a large and growing share of income to foreign owners of US assets, or rather is more likely to continue as a society of “shrewd capitalists” with the cost of servicing international debt remaining relatively low and manageable despite growing international debt. Various scenarios illustrate the reliability of the modeling framework and show how alternative future paths for key variables affect the outcomes. The relationships determining the international flows and relative debt levels—including relative rates of return, asset portfolio compositions, valuation effects, and the outlook for an improving US trade position—indicate that a manageable and sustainable outlook is more likely than often considered to be the case. Results also show, however, the extent to which the outlook is vulnerable to the loss of “exorbitant privilege.”

Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
https://doi.org/10.1111/j.1467-9396.2007.00707.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:reviec:v:15:y:2007:i:5:p:1036-1061

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0965-7576

Access Statistics for this article

Review of International Economics is currently edited by E. Kwan Choi

More articles in Review of International Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().