Housing Markets

Abstract

crisis. Many old joint ventures have been changed into wholly owned subsidiaries. Real estate prices have been dropping and affected countries are now welcoming more foreign direct investment (FDI) than ever before. We believe there will be a large change in U.S. exports and FDI in those destinations. Because our lower savings rate appears to have bottomed out, and because we are going to have a budget surplus again in 1999, our current account deficits and capital inflows will become smaller, but only after the first half of 2000. In the meantime, there will be a large increase in risks as well as opportunities in 1999, in both international trade and foreign investments.