Building on the panel-regression approach of <link rid="b11">Chinn and Prasad (2003</link>) and <link rid="b14">Gruber and Kamin (2007</link>), we assess whether differences in financial development can explain the large developing-country surpluses or large US deficits. We find little evidence to support these hypotheses. We also assess...

Relative to the “global savings glut” (GSG) hypothesis, we present a more complete picture of how capital flows contributed to the financial crisis, drawing attention to the sizable inflows from European investors into U.S. private-label asset-backed securities (ABS), including...