Free Cash, the Current Account and Bubble Creation
The present paper explores the relationship between corporations' ability to generate free cash, the lopsided current account, and recent speculation in stocks and housing. It argues that some portion of recently generated free cash is related to the outsourcing of production. Over the last two decades, foreign saving, consequent on the lopsided U.S. current account could not be absorbed by a corporate world beset by its own plethora of saving. Consequently, excess saving, both domestically grown and imported flowed toward speculative avenues â in the 1990s in stocks and more recently in housing.
When requesting a correction, please mention this item's handle: RePEc:mes:jeciss:v:44:y:2010:i:2:p:449-458. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ian Winship)or (Chris Nguyen) The email address of this maintainer does not seem to be valid anymore. Please ask Chris Nguyen to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.