01946cas a2200241 a 4500 AALejournalIMF004656 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451865684 1018-5941 BD-DhAAL BD-DhAAL Meredith, Guy. Debt Dynamics and Global Imbalances : Some Conventional Views Reconsidered / Guy Meredith. Washington, D.C. : International Monetary Fund, 2007. 1 online resource (54 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We use a general-equilibrium model to explain the rise in global trade and payments imbalances since the mid-1990s, and then to construct adjustment paths to a steady state. Assuming that the shocks giving rise to the imbalances do not suddenly reverse, simulated movements in the U.S. trade deficit and exchange rate are smaller and more gradual than suggested by partial-equilibrium analyses. An important factor reducing the size of the adjustments is a simulated real interest rate on U.S. external liabilities that is below both the interest rate on external assets and the U.S. real economic growth rate. In addition, the adjustment takes place over an extended period without significantly raising the share of U.S. assets in foreign portfolios, in part because depreciation of the dollar requires continued foreign accumulation of U.S. assets just to keep their portfolio share constant. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2007/004 Full text available on IMF http://elibrary.imf.org/view/journals/001/2007/004/001.2007.issue-004-en.xml IMF e-Library