Équilibre financier entre les États-Unis et le Japon : un modèle de choix de portefeuille à deux pays pour analyser les évolutions récentes

We build a simple portfolio equilibrium model between the United States and Japan to analyse the consequences of the recent financial developments in these two countries: very expansionary monetary and fiscal policies in Japan; substitution of private debt for public debt with an external deficit in the United States. We compare the predictions of the model to the observed interest rates, exchange rate and interest rate spreads between private and public bonds and, using the model, we examine recent developments in the economic policy of Japan and the financial mechanisms of both countries.