The External Position (IIP / NIIP)

The U.S. net international investment position (NIIP) crossed from positive to negative in the late 1980s and has deepened ever since — the United States is now the world's largest net debtor. Yet it continues to earn positive net investment income, the so-called "exorbitant privilege" examined on the return-reversal page. The net position reflects both cumulative borrowing and valuation effects on the gross stocks.^[1]

The net position is the small difference between two very large gross stocks. Both gross external assets and gross external liabilities have expanded far faster than GDP with financial globalization.

1. U.S. Bureau of Economic Analysis (2025). International Investment Position. BEA. link.