March 28, 2008

Correction to Chapter 29 Reading

Posted in Assignments at 7:22 am by davidprudente

Hi everybody,

I just realized that Mankiw is using a term in chapter 29 that is not commonly used. Mankiw uses the term Net Foreign Investment to determine the nature of a countries foreign trade. The more acceptable term for this is Net Capital Outflow.

So, where ever you read Net Foreign Investment, you should replace the term with Net Capital Outflow. They mean the exact same thing – NFI is just a term that Mankiw was trying to get used as the common term; he was not successful.

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