Foreign investment and national gain

Mr. Keynes's analysis of foreign inveestment is subject to certain emendations. First, his calculation of national gain or loss from foreign investment is incomplete because of failure to include the effect of the payment of intenrest on terms of trade. Second, if an investment is fully repaid the tendency, over the entire cycle of the investment, is for terms of trade to be turned in favor of the lending country. Third, a country may conceivably gain from a shift in terms of trade not merely if goods formerly imported become cheaper, but even if it comes to import goods previously exported.