Have US external imbalances been determined at home or abroad?

Makin, Anthony J. and Narayan, Paresh Kumar 2008, Have US external imbalances been determined at home or abroad?, Economic modelling, vol. 25, no. 3, pp. 520-531, doi: 10.1016/j.econmod.2007.08.004.

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Title Have US external imbalances been determined at home or abroad?
Author(s) Makin, Anthony J.
Narayan, Paresh KumarORCID iD for Narayan, Paresh Kumar orcid.org/0000-0001-7934-8146
Journal name Economic modelling
Volume number 25
Issue number 3
Start page 520
End page 531
Publisher Elsevier B.V.
Place of publication Amsterdam, The Netherlands
Publication date 2008-05
ISSN 0264-9993
Keyword(s) saving
international borrowing and lending
interest rates
Summary This paper examines the relationship between the United States saving–investment imbalance and long-term real interest rates using a new international borrowing and lending framework. It first establishes how domestic or international factors may primarily influence the US external imbalance and interest rates over any given time before showing that the current account and real long term interest rate share a positive and statistically significant co-integrating relationship based on data from the mid-1980's. The results suggest that while in the pre-Asian financial crisis period (1985:01–1996:04) US external deficits and long term interest rates were mainly determined by domestic factors, external factors beyond the control of domestic policymakers dominated from 1997:01–2004:04.
Language eng
DOI 10.1016/j.econmod.2007.08.004
Field of Research 140207 Financial Economics
HERDC Research category C1 Refereed article in a scholarly journal
HERDC collection year 2008
Copyright notice ©2008, Elsevier B.V.
Persistent URL http://hdl.handle.net/10536/DRO/DU:30017261

Document type: Journal Article
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
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