Where Did All The Borrowing Go? A Forensic Analysis of the U.S. External Position

Gian Maria Milesi-Ferretti (gmilesiferretti@brookings.edu) and Philip Lane

No 6655, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The deterioration in the U.S. net external position in recent years has been much smaller than the extensive net borrowing associated with large current account deficits would have suggested. This paper examines the sources of discrepancies between net borrowing and accumulation of net liabilities for the U.S. economy over the past 25 years. In particular, it highlights and quantifies the role played by net capital gains on the U.S. external portfolio and ?residual adjustments? in explaining this discrepancy. It discusses whether these ?residual adjustments? are likely to be originating from measurement errors in external assets and liabilities, financial flows, or capital gains, and explores the implications of these conjectures for the U.S. financial account and external position.

Keywords: Current account; External adjustment; Net foreign asset position; Financial integration; Capital flows; External assets and liabilities (search for similar items in EconPapers)
JEL-codes: F21 F32 F41 (search for similar items in EconPapers)
Date: 2008-01
New Economics Papers: this item is included in nep-cba and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Related works:
Chapter: Where Did All the Borrowing Go? A Forensic Analysis of the U.S. External Position (2009)
Journal Article: Where did all the borrowing go? A forensic analysis of the U.S. external position (2009)
Working Paper: Where Did All The Borrowing Go? A Forensic Analysis of the U.S. External Position (2008)
Working Paper: Where Did All the Borrowing Go? A Forensic Analysis of the U.S. External Position (2008)
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