the U.S. would experience a sudden stop of capital flows, which would unavoidably drag the world economy into a deep … instead that the root imbalance was of a different kind: The entire world had an insatiable demand for safe debt instruments … of exposing the economy to a systemic panic. This structural problem can be alleviated if governments around the world …

time, the definition of external balance has evolved in response to changes in the world economy's structure. The foreign … external balance become more difficult to apply when countries face credit rationing as a result of nonrepayment risk …

Global risk-off shocks can be highly destabilizing for financial markets and, absent an adequate policy response, may …-put framework that reduced the persistence of risk-off shocks. We also show that domestic macroeconomic and financial conditions … play a key role in benefiting from the spillovers of these policies during risk-off episodes. Countries like Japan, which …

behind this crisis is the large demand for riskless assets from the rest of the world. In this paper we present a model to … downturn by concentrating risk onto its balance sheet. In addition to highlighting the role of capital flows in facilitating … concern with capital flows is in their speculative nature, in the U.S. the risk in capital inflows derives from the opposite …

The world has a shortage of financial assets. Asset supply is having a hard time keeping up with the global demand for … and deflationary episodes in parts of the world, all fall into place once one adopts this asset shortage perspective …

the world and, b) heterogeneity in these regions' capacity to generate financial assets from real investments. In …