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Please note that the content of this book primarily consists of articles available from Wikipedia or other free sources online. Valuation Effects is a term in economics. Valuation Effects of a country are the changes in the value of assets it holds abroad, minus the changes in the value of domestic assets held by foreign investors. The traditional balance of payment identity ignores valuation effects, only recognizes that changes in the net foreign assets are fully captured by the current account. The new balance of payment identity, however, considers the role of asset price changes and…mehr

Produktbeschreibung
Please note that the content of this book primarily consists of articles available from Wikipedia or other free sources online. Valuation Effects is a term in economics. Valuation Effects of a country are the changes in the value of assets it holds abroad, minus the changes in the value of domestic assets held by foreign investors. The traditional balance of payment identity ignores valuation effects, only recognizes that changes in the net foreign assets are fully captured by the current account. The new balance of payment identity, however, considers the role of asset price changes and valuation effects. Changes in the NFA equal the current account plus valuation effects. Valuation effects are increasingly important for the U.S. in the last two decades, given a dramatic, sharp rise in international cross country portfolio holdings. For the U.S., valuation effects are offsetting its current account deficits and therefore mitigating the decline of the its net foreign assets.