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What will happen when foreigners stop lending to the United States?

Author

Listed:
  • Timothy J. Kehoe
  • Kim J. Ruhl
  • Joe Steinberg

Abstract

Since the early 1990s, the United States has borrowed heavily from its trading partners. This paper presents an analysis of the impact of an end to this borrowing, an end that could occur suddenly or gradually.

Suggested Citation

  • Timothy J. Kehoe & Kim J. Ruhl & Joe Steinberg, 2013. "What will happen when foreigners stop lending to the United States?," Economic Policy Paper 13-4, Federal Reserve Bank of Minneapolis.
    • Handle: RePEc:fip:fedmep:13-4
    as

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    References listed on IDEAS

    as
    1. Enrique G. Mendoza, 2007. "Financial Integration, Financial Deepness and Global Imbalance," 2007 Meeting Papers 746, Society for Economic Dynamics.
    2. Bernanke, B.S., 2011. "International capital flows and the returns to safe assets in the United States 2003-2007," Financial Stability Review, Banque de France, issue 15, pages 13-26, February.
    3. Christopher Otrok & Gianluca Benigno & Huigang Chen & Alessandro Rebucci & Eric R. Young, 2012. "Capital Controls or Exchange Rate Policy? A Pecuniary Externality Perspective," Working Papers 1209, Department of Economics, University of Missouri.
    4. Juan Carlos Conesa & Timothy J. Kehoe, 2017. "Gambling for redemption and self-fulfilling debt crises," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 64(4), pages 707-740, December.
    5. Eric Young & Alessandro Rebucci & Christopher Otrok, 2013. "Capital Controls or Real Exchange Rate Policy? A Pecuniary Externality Perspective," 2013 Meeting Papers 641, Society for Economic Dynamics.
    6. Francis E. Warnock & Veronica C. Warnock, 2005. "International Capital Flows and U.S. Interest Rates," The Institute for International Integration Studies Discussion Paper Series iiisdp103, IIIS.
    7. Timothy J. Kehoe & Kim J. Ruhl & Joseph B. Steinberg, 2018. "Global Imbalances and Structural Change in the United States," Journal of Political Economy, University of Chicago Press, vol. 126(2), pages 761-796.
    8. Harold L. Cole & Timothy J. Kehoe, 2000. "Self-Fulfilling Debt Crises," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(1), pages 91-116.
    9. Kehoe, Timothy J. & Ruhl, Kim J., 2009. "Sudden stops, sectoral reallocations, and the real exchange rate," Journal of Development Economics, Elsevier, vol. 89(2), pages 235-249, July.
    10. Emmanuel Farhi & Ivan Werning, 2012. "Dealing with the Trilemma: Optimal Capital Controls with Fixed Exchange Rates," NBER Working Papers 18199, National Bureau of Economic Research, Inc.
    11. Cristina Arellano & Juan Carlos Conesa & Timothy J. Kehoe, 2012. "Chronic sovereign debt crises in the Eurozone, 2010-2012," Economic Policy Paper 12-4, Federal Reserve Bank of Minneapolis.
    12. Eric Young & Alessandro Rebucci & Christopher Otrok, 2013. "Capital Controls or Real Exchange Rate Policy? A Pecuniary Externality Perspective," 2013 Meeting Papers 641, Society for Economic Dynamics.
    13. Maurice Obstfeld & Kenneth S. Rogoff, 2009. "Global imbalances and the financial crisis: products of common causes," Proceedings, Federal Reserve Bank of San Francisco, issue Oct, pages 131-172.
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    Cited by:

    1. Jacek Rothert & Andy Glover & Ayse Kabukcuoglu Dur, 2023. "Winners and losers from reducing global imbalances," GRAPE Working Papers 80, GRAPE Group for Research in Applied Economics.

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