Abstract
IN the postwar period, the international trade of the United States has played a leading role in the world economy; not only have United States exports accounted for one-fifth of the world's, but this country's export surplus has been the world's largest, financed primarily, as is well known, by government grants and loans. American foreign economic policy has received a great deal of attention and study, in part to discover the reasons for, and in part to find a way out of, the international disequilibrium situation that is now summarily called shortage. Among the proposals put forth for the elimination of a seemingly chronic export surplus and its concomitant aid programs, suggestions for increasing United States imports on the one hand,' and for a more rapid expansion of private investments abroad on the other, have received the most attention. This paper will attempt to explore the question whether the dollar shortage of the soft-currency countries can be eliminated wholly or in part by private foreign investment; it will employ United States investment experience, especially that of the postwar period, as a guide but will concern itself only with the economic problems of foreign investment. An analysis of the political difficulties that tend to discourage further United States investment in certain countries, and an evaluation of the beneficial effects this investment may have upon the industrialization of underdeveloped countries, is not within the framework of this study.
Published Version
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