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

Philip R. Lane and Gian Maria Milesi-Ferretti
Authors registered in the RePEc Author Service: Gian Maria Milesi-Ferretti () and Philip Lane

The Institute for International Integration Studies Discussion Paper Series from IIIS

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.

Date: 2008-01-11
New Economics Papers: this item is included in nep-cba and nep-mac
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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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