The income implications of rising U.S. international liabilities

Matthew Higgins, Thomas Klitgaard and Cédric Tille

Current Issues in Economics and Finance, 2005, vol. 11, issue Dec

Abstract: Although the United States has seen its net liabilities surge in recent years, its investment income balance has remained positive-largely because U.S. firms operating abroad earn a higher rate of return than do foreign firms operating here. The continuing buildup in liabilities, however, should soon push the U.S. income balance below zero. In that event, net income flows will begin to boost the nation's current account deficit instead of reducing it.

Keywords: Balance of payments; Liabilities (Accounting) (search for similar items in EconPapers)
Date: 2005
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