The Income Implications of Rising U.S. International Liabilities
8 Pages Posted: 24 Feb 2006
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: income, liabilities, current, account, international
JEL Classification: F32, F34
Suggested Citation: Suggested Citation