Sustainability, Premia, and the Dollar

35 Pages Posted: 15 Feb 2006

See all articles by Bankim Chadha

Bankim Chadha

affiliation not provided to SSRN

Steven Symansky

International Monetary Fund (IMF) - Fiscal Affairs Department

Date Written: September 1990

Abstract

This paper models the effects of foreign investors imposing a limit on the proportion of U.S. liabilities they are prepared to hold in their portfolios. Simulations show that actual premiums required on dollar assets implied by such a limit will be small. Nevertheless, such small premiums can play a quantitatively important role in preventing large buildups of claims on the United States. Moreover, the costs of such an imposed adjustment can be substantial in terms of private consumption, investment and output in the United States.

JEL Classification: 430, 440

Suggested Citation

Chadha, Bankim and Symansky, Steven, Sustainability, Premia, and the Dollar (September 1990). IMF Working Paper No. 90/82, Available at SSRN: https://ssrn.com/abstract=885011

Bankim Chadha (Contact Author)

affiliation not provided to SSRN

No Address Available

Steven Symansky

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

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