Net Foreign Assets and International Adjustment : The United States, Japan, and Germany

Net Foreign Assets and International Adjustment : The United States, Japan, and Germany
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Volume/Issue:
1993/33
Series:
IMF Working Papers
Author(s):
Jocelyn Horne, Paul Masson, and Jeroen Kremers
Publisher:
INTERNATIONAL MONETARY FUND
Published Date:
April 1993
DOI:
http://dx.doi.org/10.5089/9781451979244.001
ISBN:
9781451979244
ISSN:
1018-5941
Page:
26
This paper examines external adjustment in the United States, Japan and Germany from the perspective of net foreign asset positions. It asks two questions: What are, in the long run, the determinants of net foreign asset equilibrium? and: What are, in the short run, some of the adjustment mechanisms sustaining that equilibrium? An analysis of post-war data produces two insights. First, using a cointegration approach, the existence of long-run net foreign asset equilibrium can be identified: it is a function of demographic variables and public debt. Second, deviations from long-run equilibrium give rise to feedback through different components of domestic absorption in the three countries.
Article

Net Foreign Assets and International Adjustment

Author(s):
Jocelyn Horne, Paul Masson, and Jeroen Kremers
Published Date:
April 1993
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