A Global Perspectiveon External Positions
August 1, 2005
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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
Pages:
44
Volume:
2005
DOI:
Issue:
161
Series:
Working Paper No. 2005/161
Stock No:
WPIEA2005161
ISBN:
9781451861808
ISSN:
1018-5941
