the presence of borrowing and lending constraints on that bond. In a US versus the rest of the world (RoW) scenario, we … consumption risk relative to the rest of the world, and therefore decreases its motives for precautionary asset holdings relative … to the rest of the world. As a result of these asymmetric shifts in countries’ barriers to capital mobility, the US runs …

The paper discusses global current account imbalances in the context of an asymmetric world monetary system and … against the euro or members of the euro area (euro periphery). The paper finds that changes of world current account positions …