Prof. Naknoi and co-author YiLi Chien (Federal Reserve Bank of St. Louis) have their paper “The Risk Premium and Long-Run Global Imbalances” accepted for publication in the Journal of Monetary Economics. The paper examines the sustainability of U.S. trade deficits, given the assumption that U.S. investors take on more aggregate risk than foreign investors. It predicts that half of US trade deficits is sustainable. A copy of the working paper is available for download from RePEc.