Working Paper: CEPR ID: DP2231
Authors: Philip Lane; Gian Maria Milesi-Ferretti
Abstract: Current capital flows are closely monitored, but surprisingly little is known about the stocks of external assets and liabilities held by various countries, especially in the developing world. This paper constructs estimates of foreign assets and liabilities and their equity and debt subcomponents for a sample of 66 industrial and developing countries. It characterizes the stylized facts of estimated stocks and asks whether there are trends in net foreign asset positions and shifts in debt-equity ratios over time. Finally, it explores the sensitivity of estimates of stock positions to the treatment of valuation effects that are not captured in balance of payments data.
Keywords: external assets; external debt; foreign direct investment; portfolio equity
JEL Codes: F21; F34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| debt-equity ratios (G32) | economic stability (E63) |
| trade openness (F43) | gross stocks of foreign direct investment (FDI) and equity (F21) |
| economic development (O29) | net foreign asset positions (F32) |