consumption. We use empirical techniques that allow us to quantify the relative importance of permanent and transitory innovations … liabilities, net output and consumption all increase – consistent with the effect of productivity gains raising domestic return to … capital and thus generating an inflow of foreign capital. Conversely, shocks that cause net output and consumption to increase …

The joint dynamics of US net output, consumption, and (valuation-adjusted) foreign assets and liabilities …. While US consumption is virtually insulated from transitory shocks, these contribute considerably to the variation in net … shock – naturally interpreted as a productivity shock – raises consumption swiftly while causing net output to adjust only …

transmission, including the crowding-in of consumption and the `puzzle' of real exchange rate depreciation. Time series evidence …