The US Net International Investment Position, and Projections of US Net Income

Today, the BEA released estimates for the US net international investment position (NIIP) — the difference between what assets US residents (including the government) owns abroad and what US assets foreign residents and governments own. The decline in the value as a share of GDP has has stopped, and despite being a large negative number, US net income — income received from assets owned by the US minus income paid on assets owned by foreigners — remains positive. A new CBO working paper (Fried, “CBO’s Model and Projections of U.S. International Investment Holdings and Income Flows” ) tackles the reasons for this seemingly paradoxical phenomenon, and the prospects for its continuation.

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Motivations for Economic Policies in Western China

I’m not a China expert, but 20 years ago, I had the opportunity to hear the Chinese explanation for their planned policies in Western China (Xibu Dakaifa), translated in English journalistic accounts as “Develop the West” (I was the international finance economist on the Council of Economic Advisers at the time, and the Chinese counterpart, the State Development Planning Commission, was coming to Washington to meet with us; I was tasked with overseeing elements of the meeting).

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