US transforms from World Banker to World Venture Capitalist, impacting global imbalances.
The US has more assets than liabilities, especially after the Bretton Woods system ended. This is because the US pays less on its foreign assets than it receives. The US also tends to borrow short-term and lend long-term. As global finance grows, the US is investing more in high-yield assets like stocks and foreign direct investment. These findings help us understand the sustainability of global economic imbalances.