The Stability of Large External Imbalances: The Role of Returns Differentials
NBER Working Paper No. 13074
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This paper will also be circulated as Federal Reserve IFDP#894. The views in this paper are solely the responsibility of the author(s) and should not be interpreted as reflecting the views of the Board of Governors of the Federal Reserve System or of any other person associated with the Federal Reserve System. We thank for helpful comments Carol Bertaut, Ricardo Caballero, Charles Engel, Kristen Forbes, Gian-Maria Milesi-Ferretti, Cedric Tille, Charles Thomas, Ralph Tryon, Eric van Wincoop, Jon Wongswan, and seminar participants at the Dallas Fed. Warnock thanks the Darden School Foundation for its generous support. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.