The cost will be lower foreign capital inflow and slower growth, but greater stability should result.
Yet only about half of the capital inflow from the trade surplus was accounted for by debt service and other payments.
This reduces the net capital inflow required to finance the trade deficit.
That capital inflow is a mirror image of the deficit in trade.
The reduced capital inflow will tend to reduce the gaps between domestic investment and saving and government expenditures and tax revenue the deficit in question.
In the case of Thailand, the opening of an offshore banking center for foreign banks, intended to increase capital inflow, proved far too successful.
The details can get confusing (they just did), but we summarize them by saying we pay with a capital inflow or by borrowing from our trading partners.
These include not just the initial capital inflow itself but also the introduction of better technology and new management skills, not to mention greater competition for the existing domestic institutions.
That has required us to make up the difference between our national investment and national saving by borrowing abroad in the form of the capital inflow that finances our trade deficit.
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It is based on the fact that the sum of the budget deficit, the capital inflow to finance the trade deficit, and the difference between domestic saving and domestic investment equals zero.
However, a country with chronic deficits must pay for those deficits with capital inflows from our trading partners, and the capital inflow will tend to put downward pressure on interest rates and be stimulative to the domestic economy.
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The current-account deficit is no more than the accounting counterpart of that net inflow of capital.
The economy is growing, albeit at a modest 2.5%, and there is a net inflow of capital.
Venture money is traditionally spent on employees, so this new inflow of capital has generations hundreds of new jobs.
However, the net inflow of capital will put downward pressure on interest rates and will also stimulate job growth.
This inflow of capital will expand the U.S. economy across a wide variety of fields, creating jobs and keeping the U.S. competitive in global markets.
In 1991 Chile imposed an implicit tax on inflows of short-term capital to reduce the aggregate inflow.
But the inflow of foreign capital would put upward pressure on the rupee.
In short, jobs and opportunity are plentiful in Israel precisely because the country seeks the inflow of human capital.
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What East Asia hoards, America happily spends: the inflow of Asian capital keeps American interest rates low and demand high.
The necessary counterpart to an inflow of foreign capital is a deficit in the current account the largest component of which is trade in goods and services.
The healthy top-line growth was attributable to incremental contributions from new products and services and accretive acquisitions, as the industry witnessed renewed optimism through inflow of new capital.
When a fund experiences a large inflow of investor capital, the only way to put it to work may be to buy new issues brought to market by investment banks.
In the early 1990s, the Asian miracle economies received a large inflow of foreign private capital on account of the financial liberalization they undertook and their economic success.
The second point is true which is to say that America has enjoyed a persistent inflow, not outflow, of capital.
This was clever, because much of the gold inflow was a return of flight capital into the country and did not affect the balance of payments.
The measure is intended to encourage the inflow of long-term foreign investment capital.
Foreign firms are bringing in more capital than they need for investment: the net inflow of FDI is 60% higher than a year ago, yet the actual use of this money for fixed investment has fallen by 6%.
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