Foreign Ownership of U.S. Safe Assets: Good or Bad?

We are grateful to Mark Aguiar, Pedro Gete, Gita Gopinath, Pierre-Olivier Gourinchas, Tarek Hassan, Jonathan Heathcote, Bernard Herskovic, Matteo Maggiori, Jaromir Nosal, Helene Rey and to seminar participants at the NBER conference on Sovereign Debt and Financial Crises, November 2013, the conference on International Capital Flows and Spillovers, December 2012, the CEPR Developments in Macroeconomics and Finance Conference, November 2012, the BU/Boston Fed Conference on Macro-Finance Linkages, November 2012, NBER International Finance and Macroeconomics meeting March 2012, the Frontiers of Macroeconomics Conference at Queens University April 2012, at Carnegie Mellon, Columbia University, New York University, Ohio State University, Southhampton University, University of Miami, University of Southern California, University of Pennsylvania Wharton School and UC Davis for helpful comments. Any errors or omissions are the responsibility of the authors. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

• February 20, 2014