Publication of the first WID.world Issue Brief

The World Inequality Lab inaugurates the publication of its first issue brief, composed by Amory Gethin and dedicated to the analysis of net foreign assets and net foreign income positions around the world. WID.world issue briefs are short documents analyzing a current economic or political issue through the lens of data series available from the World Inequality Database.

Who are the world’s main foreign assets holders today? And who benefits from income transfers between countries? Public policy debates in high-income countries are increasingly focusing on the appropriation of national wealth by foreign investors and on the profit-shifting strategies of multinational firms. Yet, due to the unavailability of harmonized data sources, global perspectives on these phenomena remain rare. The issue brief exploits estimates available from WID.world to document international patterns of income transfers and foreign assets ownerships.

Due to important differences in returns from foreign holdings, net foreign income positions (income received from abroad minus income paid to foreign countries) and net foreign asset positions (assets owned abroad minus domestic assets held by foreigners) reveal very different pictures. In spite of the United States owing the equivalent of 10% of global income to the rest of world today, US adult citizens receive on average €750 per year from abroad. The situation is the opposite in China: while the world’s biggest developing economy has been accumulating reserves sufficient to buy the entire wealth of Denmark and the Czech Republic combined, its net foreign income position remains significantly negative.