The Income Implications of Rising U.S. International Liabilities

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.

Number of Pages in PDF File: 8

Keywords: income, liabilities, current, account, international

JEL Classification: F32, F34

Accepted Paper Series