A Global Perspectiveon External Positions

By Gian M Milesi-Ferretti, Philip R. Lane

August 1, 2005

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Gian M Milesi-Ferretti, and Philip R. Lane A Global Perspectiveon External Positions, (USA: International Monetary Fund, 2005) accessed September 18, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper highlights the increased dispersion in net external positions in recent years, particularly among industrial countries. It provides a simple accounting framework that disentangles the factors driving the accumulation of external assets and liabilities (such as trade imbalances, investment income flows, and capital gains) for major external creditors and debtors. It also examines the factors driving the foreign asset portfolio of international investors, with a special focus on the weight of U.S. liabilities in the rest of the world's stock of external assets. Finally, it relates the empirical evidence to the current debate about the roles of portfolio balance effects and exchange rate adjustment in shaping the external adjustment process.

Subject: Asset prices, Balance of payments, Capital flows, External position, Financial institutions, Foreign assets, Prices, Stocks

Keywords: Asia and Pacific, Asset category, Asset prices, Asset trade, Capital flow, Capital flows, Current account, Equity position, Exchange rate, External assets and liabilities, FDI assets, Financial integration, Foreign assets, Global, Middle East, Portfolio equity, Portfolio equity instrument, Rates of return on asset, Return, Return differential, Return premium, Returns influence, Stocks, Trade deficit, U.S. dollar, WP

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2005/161
Stock No:

WPIEA2005161
ISBN:

9781451861808
ISSN:

1018-5941

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