Have US external imbalances been determined at home or abroad?

Anthony Makin and Paresh Narayan ()

Economic Modelling, 2008, vol. 25, issue 3, 520-531

Abstract: This paper examines the relationship between the United States saving-investment imbalance and long-term real interest rates using a new international borrowing and lending framework. It first establishes how domestic or international factors may primarily influence the US external imbalance and interest rates over any given time before showing that the current account and real long term interest rate share a positive and statistically significant co-integrating relationship based on data from the mid-1980's. The results suggest that while in the pre-Asian financial crisis period (1985:01-1996:04) US external deficits and long term interest rates were mainly determined by domestic factors, external factors beyond the control of domestic policymakers dominated from 1997:01-2004:04.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264-9993(07)00099-5
Full text for ScienceDirect subscribers only

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:eee:ecmode:v:25:y:2008:i:3:p:520-531

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().