ECB paper finds US foreign bondholdings rooted in past

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A working paper published by the European Central Bank (ECB), on September 17, suggests the foreign bondholdings of US investors 70 years ago can help explain holdings today.

The authors, Livia Chiţu, Barry Eichengreen and Arnaud Mehl, estimate that a 1% increase in US holdings by a country in 1943 catalysed holdings 1% higher in the same country now, which the researchers attribute to the costs of market entry.

Firms face fixed costs when they gather intelligence on foreign bonds, and again

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