As noted earlier, U.S. savers’ appetite for increasing the share of their portfolio devoted to foreign assets began to wane, and at roughly the same time capital account liberalization in other countries freed a large pool of savings to be invested internationally.
These newly freed savings flowed disproportionately to the United States, where as a consequence one must assume risk-adjusted returns were perceived to be highest. Apparently, rapid U.S. productivity gains not seen elsewhere raised expectations for the return to capital on U.S. assets.