The Financial Role of East Asian Economies in Global Imbalances: An Econometric Assessment of Developments after the Global Financial Crisis

Publication | August 2013

The overinvestment in the United States by most East Asian economies has remained substantial since the global crisis. These economies, particularly the People's Republic of China, continue to hold excessive amounts of US securities.

To empirically assess the evolution of global imbalances since the global financial crisis of 2008/09, the authors examine how the security investment positions of major East Asian economies in United States (US) financial markets—equities, bonds, and bank lending—changed after the crisis. Their econometric analysis finds that the "overinvestment" of most East Asian economies in the US remained substantial after the global crisis.

Contents 

  • Abstract
  • Introduction
  • East Asian Holdings of US Financial Assets
  • Empirical Specifications
  • Empirical Results
  • Discussion and Concluding Remarks
  • References