been considered one of the main reasons for the turbulences in the world economy since 2007. Economic theory suggests that …. To investigate on the mechanisms that allow the USA to do so, this paper sets up a two-country DGE model with asymmetric … of Seigniorage and valuation effects to be able to run a continuous current account deficit. These mechanisms work in …

been considered one of the main reasons for the turbulences in the world economy since 2007. Economic theory suggests that … investigate on the mechanisms that allow the US to do so, this paper sets up a two country DGE model with asymmetric liquidity … Seigniorage and valuation effects to be able to run a continuous current account deficit. These mechanisms work in favour of their …

stabilizing valuation effects contribute as much as 31% of the external adjustment. Our theory also has asset pricing implications …