Publisher's Synopsis
Measured U.S. net investment position is negative and has been so for over two decades. However, as shown in Figure 1, U.S. net earnings on foreign-owned assets has been positive despite the fact that the net investment position has been growing more negative over this period. The reason for the continued positive return is that American investors receive higher returns on their investments abroad than their foreign counterparts do on their U.S. investments. The average inward return on foreign assets between 1982 and 2004 was 4.5 percent compared to 5.7 percent for outward investment1. American investors also receive higher returns on U.S. investments than foreigners.
