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Title: |
Estimates of the Macroeconomic Impact of
Foreign Investment in Australia |
| Author: |
Layton, Allan
P.; Makin, Tony |
| Author
Affiliation: |
Queensland U of
Technology; U Queensland |
| Source: |
International Economic Journal, Winter 1993, v. 7, no. 4, pp. 35-42 |
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Publication Date: |
Winter 1993 |
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Abstract: |
Foreign investment supplements domestic
saving, allowing an economy to accumulate real capital more quickly.
Therefore, the question of the desirability of a current account
deficit, which necessarily matches a net capital inflow, essentially
depends on whether the extra real output made possible by the foreign
funds exceeds their real servicing cost. This paper provides econometric
estimates which suggest that in the case of Australia, a country which
experienced comparatively large external imbalances over the 1980s, the
use of foreign capital has raised national income by more than would
have occurred in absence of the foreign inflow. |
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