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Unwinding external stock imbalances? The case of Italy�s net international investment position

Author

Listed:
  • Valerio Della Corte

    (Bank of Italy)

  • Stefano Federico

    (Bank of Italy)

  • Enrico Tosti

    (Bank of Italy)

Abstract

This paper is a case study of an (almost complete) adjustment of Italy�s external stock imbalance. After reaching a peak of around 25 per cent of GDP in early 2014, Italy�s net external debtor position has steadily decreased, reaching less than 7 per cent of GDP at the end of 2017. The contribution of this work is twofold. First, it reviews the main developments in Italy�s net international investment position (NIIP) since 1999. Second, it reports a baseline projection of Italy�s NIIP over a medium-term horizon, as implied by current account balance forecasts. Since this projection ignores the role of valuation adjustments, the study also provides an analysis of their sensitivity to a set of potential movements in exchange rates and equity or bond markets.

Suggested Citation

  • Valerio Della Corte & Stefano Federico & Enrico Tosti, 2018. "Unwinding external stock imbalances? The case of Italy�s net international investment position," Questioni di Economia e Finanza (Occasional Papers) 446, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_446_18
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2018-0446/QEF_446_18.pdf
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    References listed on IDEAS

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    Cited by:

    1. Valerio Della Corte & Stefano Federico, 2019. "Two tales of foreign investor outflows: Italy in 2011-2012 and 2018," Questioni di Economia e Finanza (Occasional Papers) 535, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    international investment position; stock imbalances; valuation adjustments; current account;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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