Net Foreign Assets and International Adjustment; The United States, Japan, and Germany
Paul Masson () and
Jeroen J. M. Kremers
No 1993/033, IMF Working Papers from International Monetary Fund
This paper examines external adjustment in the United States, Japan and Germany from the perspective of net foreign asset positions. It asks two questions: What are, in the long run, the determinants of net foreign asset equilibrium? and: What are, in the short run, some of the adjustment mechanisms sustaining that equilibrium? An analysis of post-war data produces two insights. First, using a cointegration approach, the existence of long-run net foreign asset equilibrium can be identified: it is a function of demographic variables and public debt. Second, deviations from long-run equilibrium give rise to feedback through different components of domestic absorption in the three countries.
Keywords: Foreign assets; Public debt; Foreign currency exposure; Expenditure; Current account; WP,Germany,GNP,F/Y,ratio (search for similar items in EconPapers)
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Journal Article: Net foreign assets and international adjustment: The United States, Japan and Germany (1994)
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