Cross-Country Variation in Patience, Persistent Current Account Imbalances and the External Wealth of Nations

This paper is the first to utilize large-scale international surveys on economic preferences examine long-run relationships between patience, current accounts and external wealth. We find robust empirical evidence that countries with more patient individuals tend run persistent account surpluses, which in turn result accumulation of foreign assets. theoretically plausible but empirically unexplored relationship holds true for euro area imbalances, global imbalances net asset positions worldwide. While existing literature concentrates proximate macroeconomic determinants, this paper’s extension inferences from deep determinants (i.e., time preferences) distribution wealth nations positions) makes a unique contribution literature. Our finding showing heterogeneities contribute suggests pattern as well might be very persistent.