Long-Term Capital Movements

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Long-Term Capital Movements

Author Info

Gian Maria Milesi-Ferretti
Philip R. Lane

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Abstract

International financial integration allows countries to become net creditors or net debtors with respect to the rest of the world. In this paper, we show that a small set of fundamentals-shifts in relative output levels, the stock of public debt and demographic factors-can do much to explain the evolution of net foreign asset positions. In addition, we highlight the role that "external wealth" plays in determining the behaviour of the trade balance, and we provide some evidence that a portfolio balance effect exists: real interest rate differentials are inversely related to net foreign asset positions.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 01/107.

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Length: 49 pages
Date of creation: 04 Sep 2001
Date of revision:
Handle: RePEc:imf:imfwpa:01/107

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Related research
Keywords: Capital flows ; Public debt ;

Other versions of this item:

Paper
- Philip Lane & Gian Maria Milesi-Ferretti, 2001. "Long-Term Capital Movements," CEG Working Papers 20018, Trinity College Dublin, Department of Economics. [Downloadable!]
- Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2001. "Long-Term Capital Movements," CEPR Discussion Papers 2873, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Philip R. Lane & Gian Milesi-Ferretti, 2001. "Long-Term Capital Movements," NBER Working Papers 8366, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
- Philip Lane & Gian Maria Milesi-Ferretti, 2001. "Long-Term Capital Movements," Trinity Economics Papers 200112, Trinity College Dublin, Department of Economics. [Downloadable!]
Chapter
- Philip R. Lane & Gian Maria Milesi-Ferretti, 2002. "Long-Term Capital Movements," NBER Chapters, in: NBER Macroeconomics Annual 2001, Volume 16, pages 73-136 National Bureau of Economic Research, Inc. [Downloadable!]

References listed on IDEAS
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