The external wealth of nations database - Brookings Institution

What does the External Wealth of Nations (EWN) measure?

The EWN provides estimates of each country’s external financial assets and liabilities. These data also yield estimates of each country’s net international investment position (NIIP), the difference between its total external financial assets and its total external liabilities.

What are external financial assets and liabilities?

External financial assets are claims by domestic residents on nonresidents, consisting of:

  • foreign direct investment (controlling stakes by domestic firms in overseas’ affiliates);
  • portfolio investment (holdings by domestic residents of stocks or bonds issued by nonresident entities);
  • other investment (including loans to or deposit in nonresident entities, trade credits, etc);
  • financial derivatives;
  • foreign exchange reserves (holdings of liquid foreign-currency assets by the domestic central bank).

Financial liabilities are defined analogously (with the exception of foreign exchange reserves—any liability of the central bank vis-à-vis nonresidents is classified in the liability category corresponding to the nature of such liability). For example, if a U.S. firm has a controlling interest in an Irish firm domiciled in Ireland, that is an external asset of the U.S. and an external liability of Ireland. Similarly, if an Irish individual holds stock in a U.S. firm, that’s an external asset of Ireland and an external liability of the U.S.

In accordance with the conventions in balance of payments...

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