Carnegie Endowment for International Peace
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While foreign investment usually benefits developing economies and creates local economic benefits in advanced economies, it generally does not benefit advanced economies on the whole except in very limited cases. On the contrary, foreign investment in advanced economies is more likely to lead to higher unemployment or rising debt.
The biggest constraint to the EU’s survival is debt. Europe will not grow and unemployment will not drop until the costs of the excessive debt burdens are addressed.
National savings represent a lot more than the thriftiness of local households, and as such it has a lot less to do with household or cultural preferences and more so with the policies or institutions that restrain the household share of GDP.
The current cycle of globalization could end in a painful period of debt adjustment and payment imbalances across the globe, with a likely slowdown of growth in China, a possible abandonment of the euro, and the risk of increasing U.S. protectionism.