U.S. external imbalances: an empirical approach

This paper analyzes the behaviour of U.S. net external position since end Bretton Woods system and examines alternative paths for future adjustment. We estimate a present value expression that relates current imbalance with expected portfolio return differentials exports growth. find will be main channel Half-lives adjustments towards balanced are around 10 years, these having been delayed due to COVID-19 crisis. The U.S.external adjustment would also involve significant depreciation dollar.