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Brad Setser expresses concern that the Administration is overstating both the size of foreign investment inflows and their significance to the U.S. economy. He argues that most investment activity in the country is typically funded domestically rather than by foreign sources.
Setser cautions that an overemphasis on foreign investment may distort the true drivers of U.S. economic growth.
Setser has previously tracked other shifts in global financial flows. He has observed that fx reserves have declined most for oil-importing countries such as Turkey and India. In another analysis, he highlighted the use of Chinese export statistics to address discrepancies in U.S. import data. These earlier observations add context to his recent assessment of U.S. investment inflows.