Net Foreign Asset Positions, Capital Flows and GDP Spillovers.

This paper sheds light on global GDP spillovers in the context of external imbalances. We adopt a Bayesian time-varying panel vector autoregression framework to analyze the global implications of changes in assets and liabilities of the US and the Euro Area in a global framework which includes 25 industrial and emerging economies. We find significant evidence for assets and liabilities spillovers from positions in the Euro Area and the US which often result in negative effects on GDP growth. [ABSTRACT FROM AUTHOR]