01919cas a2200265 a 4500 AALejournalIMF009418 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451867244 1018-5941 BD-DhAAL BD-DhAAL Balakrishnan, Ravi. Globalization, Gluts, Innovation or Irrationality : What Explains the Easy Financing of the U.S. Current Account Deficit? / Ravi Balakrishnan, Volodymyr Tulin, Tamim Bayoumi. Washington, D.C. : International Monetary Fund, 2007. 1 online resource (39 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 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 industrialized countries explain a large share of external financing. The savings glut hypothesis (including difficult-to-track petrodollar recycling) and U.S. financial innovation are also important, in part as a cause of declining home bias in industrialized countries. The latter underscores the importance of not looking at these factors in isolation, but rather as a constellation of forces that can be self-reinforcing. Mode of access: Internet Bayoumi, Tamim. Tulin, Volodymyr. IMF Working Papers; Working Paper ; No. 2007/160 Full text available on IMF http://elibrary.imf.org/view/journals/001/2007/160/001.2007.issue-160-en.xml IMF e-Library