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William Watson: Foreign investment isn't key. Business investment is

What matters for productivity, output and growth is giving workers more capital. It doesn't especially matter where that capital comes from

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Suppose a new country is discovered in which money actually does grow on trees. The leaves are golden, not just in the fall, but all year round. The reason is their veins contain small deposits of gold. But getting the gold out requires ladders, saws, chippers, trucks, roads, smelters and so on. Because we assume New Country is uninhabited, all that investment has to be financed by foreigners, people from Old Countries.

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