This paper, prepared for the annual meetings of the American Economic Association, discusses how the increases in the U.S. budget deficits since 1980 have affected the economies of Western Europe. The analysis emphasizes that U.S. deficits have not only affected these economies directly but have...

The purpose of the present study is to measure the extent to which an increase in the total capital stock induces an increase in the stock of residential capital, i.e., to measure the marginal propensity of additional capital to be absorbed in residential capital. A knowledge of this propensity...

Since the spring of 1990, the rates of growth of real income, of nominal income, and of the broad monetary aggregate (M2) have been substantially less than the Federal Reserve had set as targets and than most observers regarded as appropriate. The breakdown of the traditional economic relations...

Our paper begins with the relatively simple problem of optimal taxation as viewed by the capital-exporting ("home") country when it can assume that its actions do not alter the tax rate in the host country. Section I also shows that when foreign investment accounts for a significant fraction of...

The effect of outbound foreign direct investment (FDI) on the national income of the parent firm's country depends on the relative importance of two countervailing factors: the loss of tax revenue to the foreign government and the increased use of foreign debt. The present paper develops an...

This paper analyzes the effect of outbound foreign direct investment (FDI) on the domestic capital stock. The first part of the paper shows that only about 20 percent of the value of assets owned by U.S. affiliates abroad is financed by cross-border flows of capital from the United States. An...