This was soon recognized since the unsustainability of growing current account imbalances was evident, even though variations in the value of financial assets and liabilities contributed to reducing the explosive expansion of the country’s net external position (Figure 1).
The risks associated with such a growth model, in which the rapid expansion of the world’s largest economy was financed with capital from the rest of the world, including, somewhat paradoxically, emerging and developing countries, had been stressed repeatedly and from many sides, although there was no lack of less alarmed observers and analyses suggesting that what appeared to be fundamental imbalances in the external accounts were the result of sustainable developments.