Working Paper: CEPR ID: DP5644
Authors: Philip R. Lane; Gian Maria Milesi-Ferretti
Abstract: We construct estimates of external assets and liabilities for over 140 countries over the period 1970-2004. We describe our estimation methods and present some key features of the data, both at the country and at the global level. We focus in particular on trends in net and gross external positions, as well as on the composition of international portfolios, distinguishing between foreign direct investment, portfolio equity investment, foreign exchange reserves, and external debt. We also document the existence of a 'world net foreign asset discrepancy' (the stock counterpart to the world current account discrepancy) and identify the asset categories that account for this discrepancy.
Keywords: International financial integration; Net foreign assets
JEL Codes: F32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| financial globalization (F30) | increased gross foreign assets (F30) |
| increased gross foreign assets (F30) | magnifies fluctuations in the value of cross-border holdings (F31) |
| financial globalization (F30) | volatility of international asset values (G15) |
| financial crises (G01) | changes in the composition of international balance sheets (F30) |
| valuation effects (Q51) | volatility of net foreign asset positions (F32) |
| regional economic policies (R11) | external financial stability (F65) |