Tag Archives: Net International Investment Position

The U.S. has long held an external balance sheet that is comprised of foreign equity assets, mainly in the form of direct investment (DI), and liabilities held abroad primarily in the form of debt, including U.S. Treasury securities. This composition is known “long equity, short debt.” Pierre-Olivier Gourinchas of UC-Berkeley and Hélène Rey of the London Business School claim that this allocation has allowed the U.S. to serve as the “world’s venture capitalist,” issuing short-term debt in...

Nothing much changed since I posted on this a couple of years ago. The U.S. net international investment position at the end of the first quarter of 2016 was −$7.5 trillion, which corresponds to about 40% of GDP, higher than two years ago. But no real problem in my view Note that this is the sort of number that economists show when they want to suggest a possible run on the dollar, and the demise of its role as a reserve currency. The last report by the Bureau of Economic Analysis (BEA) is...