The theory in the article suggests that countries can use taxes on international capital flows to manipulate their terms of trade over time. If a country is growing faster than others, it should tax capital inflows or subsidize outflows. If it's growing slower, it should tax outflows or subsidize inflows. In the long run, as countries' endowments equalize, these taxes should approach zero. The focus is on interest rate manipulation, not the country's overall financial position.