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Net Foreign Assets and International Adjustment: The United States, Japan, and Germany
Author:
Ms. Jocelyn Horne null

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Mr. Paul R Masson
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Jeroen J. M. Kremers null

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Series:
IMF Working Papers
Volume/Issue:
Volume 1993: Issue 033
Language:
English
Publication Date:
01 Apr 1993
DOI:
https://doi.org/10.5089/9781451979244.001
ISBN:
9781451979244
ISSN:
1018-5941
Pages:
26
Keywords:
WP; Germany; GNP; F/Y; ratio; GNP ratio; debt ratio; equilibrium of the United States; dependency ratio; asset accumulation; asset stock accumulation; youth dependency ratio; exchange rate movement; ratio to GNP; current account flow; Foreign assets; Foreign currency exposure; Current account
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund