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Investing for Productivity and Prosperity (1994) / Chapter Skim
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Historical and Comparitive Performance
Pages 13-19

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From page 13...
... growth is evident in a comparison of industrial countries' growth in per capita real GDPs over a 30-year period adjusted for purchasing power parity (Table 1~. There is undoubtedly some truth in the proposition that other countries are simply catching up, a natural and expected phenomenon of international economics after World War II.
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From page 14...
... Table 3 compares net national saving in the United States with that of other industrialized nations.
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From page 16...
... It is difficult to tell whether in our capital allocation system the favorable tax treatment is or is not outweighed by the negative effect of the downward pressure on reported earnings. In the early to mid-1980s, the nation's savings continued to decline whereas gross private domestic investment picked up, producing a large savings gap (Figure 1~.
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From page 17...
... Third, until full integration of international financial markets has been achieved and it is generally agreed that integration has not been achieved with respect to equity capital-a low saving rate relative to the demand for investment funds in the United States will elevate the domestic cost of funds and hence the domestic cost of capital and will retard domestic investment relative to international standards. Finally, the United States may not always be able to rely on a continued inflow of foreign capital to finance domestic investment.
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From page 18...
... - 18 D ._ V: Cal LO _ a; sit ·_t X c: ~ O ~ 5= O au an ~ ~ C1, Cat Cal m L4 ~ O C: 40 O en CQ ~ ~ .
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From page 19...
... investors have invested large sums in foreign equities and bonds, so that the total external financing needs of the United States were as large as $200 billion in 1993. Such methods of financing are probably not sustainable for such large sums (International Bank Credit Analyst, 19941.5 SThis is composed of the current account imbalance (approximately $109 billion in 1993)
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Key Terms

  • domestic investment
  • net national
  • reported earnings
  • national savings
  • domestic cost

  • foreign capital
  • purchasing power
  • power parity
  • nonresidential fixed
  • fixed investment

  • current expenditure
  • national saving
  • saving rate
  • goes public
  • forego intangible

  • accounting rules
  • investment funds
  • appropriately financed
  • business expenditures
  • comparative data

  • recent period
  • accepted accounting
  • depreciation rate
  • foreign equities
  • historical levels

  • expected phenomenon
  • process improvements
  • enabling investment
  • foreign ownership
  • whereas gross


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