A Study On Net Capital Inflows And The Sustainability Of The United States Net External Debt

Global imbalance has become the hotspot issue in the study of world economy and has been concerned by scholars at home and broad, governments and international organizations. The U.S. external imbalance has been the prominent feature of the global imbalance and the capital inflows to U.S. occupy the high ratio of global capital flows. Both the sustainability of global balance of payments and the stability of current international currency system have been determined by the sustainability of the U.S. net external debt. Therefore, a study of net capital inflows and the U.S. net external debt has important practical significance.Under the basic analytical frame of the mainstream economic supply and demand, firstly this thesis analyzes the current situation, the overall change and the structural change of net capital inflows and the U.S. net external debt from the historical angle. Secondly, construct an econometrics model to study the reason why the U.S. net external debt expands from the angel of net capital inflows. Then unify both the U.S. capital demand and the international capital supply to analyze the practical conditions of the U.S. net external debt sustain, further seek the answer whether the U.S. net external debt can sustain. Finally expatiate on the adjustment direction of the U.S. net external debt from the global angel, this adjustment influence on China and some pieces of advice for Chinese government from the aspects of the domestic demand, the foreign trade development strategy, the exchange rate and the foreign exchange reserve management.The theoretical and empirical research on net capital inflows and the sustainability of the U.S. net external debt indicated that, the net capital inflows to U.S can not drove by the difference been the U.S. interest rate and the world interest rate completely, but mainly lies in the gap of U.S. savings and investment. The U.S. net external debt will expand unceasingly, but it is uncertain for the wish of international capital inflows to the United States. Therefore, the U.S. net external debt can only sustain a period of time in the short-term, but it will be adjusted inevitably in the long-term.