Jump to ContentJump to Main Navigation
G7 Current Account ImbalancesSustainability and Adjustment$
Users without a subscription are not able to see the full content.

Richard H. Clarida

Print publication date: 2007

Print ISBN-13: 9780226107264

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226107288.001.0001

Show Summary Details
Page of

PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 27 June 2022

From World Banker to World Venture Capitalist

From World Banker to World Venture Capitalist

U.S. External Adjustment and the Exorbitant Privilege

(p.11) 1 From World Banker to World Venture Capitalist
G7 Current Account Imbalances

Pierre-Olivier Gourinchas

Hélène Rey

University of Chicago Press

This chapter investigates the historical evolution of U.S. external assets and liabilities at market value since 1952. It shows strong evidence of a sizeable excess return of gross assets over gross liabilities. It also demonstrates that the United States tends to borrow short and lend long. It supports the notion that the United States enjoyed a significant premium on its gross assets relative to its liabilities and that this premium has been increasing since the collapse of the Bretton Woods fixed exchange rate system. The collapse of Bretton Woods has not deprived the United States of its fundamental role as world liquidity provider. It is found that depreciations are associated with significantly larger returns on gross assets and lower returns on gross liabilities. Furthermore, while the United States is still some ways away from making net payments on its mounting stock of net liabilities, that moment is approaching.

Keywords:   external assets, gross liabilities, market value, United States, gross assets, Bretton Woods, fixed exchange rate, liquidity provider

Chicago Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.