FRB: Implications for Future U. S. Net Investment Payments of Growing U.S. Net International Indebtedness

International Finance Discussion Papers

Implications for Future U. S. Net Investment Payments of Growing U.S. Net International Indebtedness
Lois E. Stekler and William L. Helkie
1989-358 (July 1989)

Abstract: In the 1980s, the United States developed a large and persistent current account deficit, financed by borrowing from abroad. The purpose of this paper is to explore the sustainability of these large deficits from one of several possible perspectives. Simulations of a model of the U.S. current account are used to examine the future servicing burden implied by the accumulating U.S. indebtedness to foreigners (or more precisely by the negative net international investment position).

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