Pierre-Olivier Gourinchas and Hélène Rey
- Published in print:
- 2007
- Published Online:
- February 2013
- ISBN:
- 9780226107264
- eISBN:
- 9780226107288
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226107288.003.0002
- Subject:
- Economics and Finance, Financial Economics
This chapter investigates the historical evolution of U.S. external assets and liabilities at market value since 1952. It shows strong evidence of a sizeable excess return of gross assets over gross ...
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This chapter investigates the historical evolution of U.S. external assets and liabilities at market value since 1952. It shows strong evidence of a sizeable excess return of gross assets over gross liabilities. It also demonstrates that the United States tends to borrow short and lend long. It supports the notion that the United States enjoyed a significant premium on its gross assets relative to its liabilities and that this premium has been increasing since the collapse of the Bretton Woods fixed exchange rate system. The collapse of Bretton Woods has not deprived the United States of its fundamental role as world liquidity provider. It is found that depreciations are associated with significantly larger returns on gross assets and lower returns on gross liabilities. Furthermore, while the United States is still some ways away from making net payments on its mounting stock of net liabilities, that moment is approaching.Less
This chapter investigates the historical evolution of U.S. external assets and liabilities at market value since 1952. It shows strong evidence of a sizeable excess return of gross assets over gross liabilities. It also demonstrates that the United States tends to borrow short and lend long. It supports the notion that the United States enjoyed a significant premium on its gross assets relative to its liabilities and that this premium has been increasing since the collapse of the Bretton Woods fixed exchange rate system. The collapse of Bretton Woods has not deprived the United States of its fundamental role as world liquidity provider. It is found that depreciations are associated with significantly larger returns on gross assets and lower returns on gross liabilities. Furthermore, while the United States is still some ways away from making net payments on its mounting stock of net liabilities, that moment is approaching.
Yilmaz Akyüz
- Published in print:
- 2017
- Published Online:
- July 2017
- ISBN:
- 9780198797173
- eISBN:
- 9780191838668
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198797173.003.0003
- Subject:
- Economics and Finance, Financial Economics, Development, Growth, and Environmental
After recurrent crises with severe consequences in the 1990s and early 2000s EDEs have become even more closely integrated into what is now widely recognized as an inherently unstable international ...
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After recurrent crises with severe consequences in the 1990s and early 2000s EDEs have become even more closely integrated into what is now widely recognized as an inherently unstable international financial system. This chapter discusses the factors accelerating global financial integration of EDEs, including monetary policies in major advanced economies, notably the United States. It examines capital inflows and outflows, external balance sheets, the size and composition of gross external assets and liabilities, distinguishing between equity and debt, private and public sectors, local currency and foreign currency debt, bond issues and bank loans, and cross-border and local lending by international banks. It provides data and information on the currency composition of external debt, and non-resident participation in domestic financial markets of emerging economies. These are used to identify the changes in the depth and pattern of integration of emerging economies into the international financial system since the early 1990s.Less
After recurrent crises with severe consequences in the 1990s and early 2000s EDEs have become even more closely integrated into what is now widely recognized as an inherently unstable international financial system. This chapter discusses the factors accelerating global financial integration of EDEs, including monetary policies in major advanced economies, notably the United States. It examines capital inflows and outflows, external balance sheets, the size and composition of gross external assets and liabilities, distinguishing between equity and debt, private and public sectors, local currency and foreign currency debt, bond issues and bank loans, and cross-border and local lending by international banks. It provides data and information on the currency composition of external debt, and non-resident participation in domestic financial markets of emerging economies. These are used to identify the changes in the depth and pattern of integration of emerging economies into the international financial system since the early 1990s.
