{
  "title": "Globalization, Gluts, Innovation or Irrationality: What Explains the Easy Financing of the U.S. Current Account Deficit?",
  "publication": "IMF Working Papers, July 1, 2007",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/globalization-gluts-innovation-or-irrationality-what-explains-the-easy-financing-of-the-u-s-21118",
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  "summary": "This paper examines the roles of U.S. financial innovation, financial globalization, and the savings glut hypothesis in explaining the rise in U.S. external debt, first in a portfolio balance model, and then empirically.",
  "sections": [
    {
      "heading": "Research question and approach",
      "content": "- Examines the roles of:\n  - U.S. financial innovation,\n  - financial globalization, and\n  - the savings glut hypothesis\n  in explaining the rise in U.S. external debt.\n- Methodology:\n  - Portfolio balance model analysis.\n  - Empirical analysis following the model."
    },
    {
      "heading": "Key findings",
      "content": "- Financial deepening and falling home bias in industrialized countries explain a large share of external financing.\n- The savings glut hypothesis (including difficult-to-track petrodollar recycling) is important in explaining external financing.\n- U.S. financial innovation is also important, partly because it contributed to declining home bias in industrialized countries.\n- These factors should be viewed as a constellation of forces that can be self-reinforcing rather than in isolation."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subjects: Bonds, Emerging and frontier financial markets, Foreign assets, Securities markets, Sovereign bonds\n- Keywords: current account, fixed income, global bond, government bond, WP"
    },
    {
      "heading": "Notable metadata and logistics",
      "content": "- Format availability: More Formats on IMF eLibrary; Order a Print Copy (as listed on the source)\n- Related programmatic links shown on the source: IMF Working Papers; United States and the IMF; Visit the IMF eLibrary; IMF Publications Newsletter\n\nSource: Globalization, Gluts, Innovation or Irrationality: What Explains the Easy Financing of the U.S. Current Account Deficit?, IMF Working Papers 2007/160, accessed via https://www.imf.org/en/publications/wp/issues/2016/12/31/globalization-gluts-innovation-or-irrationality-what-explains-the-easy-financing-of-the-u-s-21118\n\n---\n\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/globalization-gluts-innovation-or-irrationality-what-explains-the-easy-financing-of-the-u-s-21118"
    }
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    "Authors: Ravi Balakrishnan, Volodymyr Tulin, Tamim Bayoumi",
    "Published: July 1, 2007",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451867244.001",
    "Examines the roles of:",
    "Methodology:",
    "Financial deepening and falling home bias in industrialized countries explain a large share of external financing.",
    "The savings glut hypothesis (including difficult-to-track petrodollar recycling) is important in explaining external financing.",
    "U.S. financial innovation is also important, partly because it contributed to declining home bias in industrialized countries.",
    "These factors should be viewed as a constellation of forces that can be self-reinforcing rather than in isolation.",
    "Subjects: Bonds, Emerging and frontier financial markets, Foreign assets, Securities markets, Sovereign bonds",
    "Keywords: current account, fixed income, global bond, government bond, WP",
    "Format availability: More Formats on IMF eLibrary; Order a Print Copy (as listed on the source)",
    "Related programmatic links shown on the source: IMF Working Papers; United States and the IMF; Visit the IMF eLibrary; IMF Publications Newsletter"
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