Citation

Discussion Paper Details

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Title: A Global Perspective on External Positions

Author(s): Philip R. Lane and Gian Maria Milesi-Ferretti

Publication Date: September 2005

Keyword(s): capital flows, external assets and liabilities and financial integration

Programme Area(s): International Macroeconomics

Abstract: The 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 US 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.

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Bibliographic Reference

Lane, P and Milesi-Ferretti, G. 2005. 'A Global Perspective on External Positions'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=5234