This paper examines external adjustment in the U.S., Japan and Germany from the perspective of net foreign asset positions. It asks two questions: What are, in the long run, the determinants of net foreign asset equilibrium? and: What are, in the short run, the adjustment mechanisms sustaining...

This paper discusses recent empirical research on the interplay between fiscal policies and external imbalances in the G3 countries, focusing on the stock-flow dynamics of public and foreign deficits and debt accumulation