Balakrishnan, Ravi; Bayoumi, Tamim; Tulin, Volodymyr - In: IMF Staff Papers 56 (2009) 2, pp. 410-445
This paper examines the roles of U.S. financial innovation, financial globalization, and the savings glut hypothesis in explaining the rise in U.S. external debt, first in a portfolio balance model, and then empirically. Perhaps surprisingly, financial deepening and falling home bias in...