I would additionally say that the affect on reduced revenue can differ between decrease funding and hence capital inventory versus decrease NIIP.
open economy definition
A small open financial system, abbreviated to SOE, is an economy that participates in international commerce , however is sufficiently small in comparison with its trading companions that its policies don’t alter world prices, interest rates , or incomes Thus, the international locations with small open economies are value takers That is not like a large open financial system , the actions of which do affect world costs and income. The superior U.S. price of return on FDI, as well as the better tilt in U.S. international investments toward FDI, accounts for the $322 billion earnings surplus recorded on this category in 2011…The United States has earned a substantial premium on FDI investments at least for the reason that 1960s.
No economy is completely open … Read the rest
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