Download or read book ARE CAPITAL FLOWS CONSISTENT WITH THE NEOCLASSICAL GROWTH MODEL EVIDENCE FORM A CROSS SECTION OF DEVELOPING COUNTRIES written by Stefano MANZOCCHI and published by . This book was released on 1996 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Are Capital Flows Consistent with the Neoclassical Growth Model written by Stefano Manzocchi and published by . This book was released on 1996 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book On the Dynamics of Economic Growth written by Mr.Michael Sarel and published by International Monetary Fund. This book was released on 1994-11-01 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the dynamics of economic growth. First, it demonstrates that the standard neoclassical growth model with constant elasticity of intertemporal substitution is not consistent with the patterns of development we observe in the real world, once we consider the initial conditions. Second, it examines an alternative growth model, which is consistent with endogenously determined initial conditions and also generates dynamics that are in accord with the historical patterns of growth rates, capital flows, savings rates and labor supply. The alternative model is a generalized version of the neoclassical growth model, with increasing rates of intertemporal substitution due to a Stone-Geary type of utility.
Download or read book International Capital Flows and Development written by Mr.Thierry Tressel and published by International Monetary Fund. This book was released on 2010-10-01 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Does capital flow from rich to poor countries? We revisit the Lucas paradox and explore the role of capital account restrictions in shaping capital flows at various stages of economic development. We find that, when accounting for the degree of capital account openness, the prediction of the neoclassical theory is confirmed: less developed countries tend to experience net capital inflows and more developed countries tend to experience net capital outflows, conditional of various countries’ characteristics. The findings are driven by foreign direct investment, portfolio equity investment, and to some extent by loans to the private sector.
Download or read book Long Term International Capital Movements and Technology written by Mr.Harm Zebregs and published by International Monetary Fund. This book was released on 1999-09-01 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the theoretical literature on the question of how long-term international capital movements depend on the international distribution of technology. It focuses on long-term investment flows, as these are more affected by international differences in technologies than short-term financial flows. International capital movements are investigated in the context of various technology specifications, ranging from models with only one common technology to those with multiple and endogenous technologies. The paper demonstrates that the theoretical specification of technology is crucial to the prediction of the size and direction of international capital movements.
Download or read book Capital Flows to Developing Countries written by Pierre-Olivier Gourinchas and published by . This book was released on 2007 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: According to the consensus view in growth and development economics, cross country differences in per-capita income largely reflect differences in countries' total factor productivity. We argue that this view has powerful implications for patterns of capital flows: everything else equal, countries with faster productivity growth should invest more, and attract more foreign capital. We then show that the pattern of net capital flows across developing countries is not consistent with this prediction. If anything, capital seems to flow more to countries that invest and grow less. We argue that this result -- which we call the allocation puzzle -- constitutes an important challenge for economic research, and discuss some possible research avenues to solve the puzzle.
Download or read book On the Dynamics of Economic Growth written by Michael Sarel and published by . This book was released on 2006 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the dynamics of economic growth. First, it demonstrates that the standard neoclassical growth model with constant elasticity of intertemporal substitution is not consistent with the patterns of development we observe in the real world, once we consider the initial conditions. Second, it examines an alternative growth model, which is consistent with endogenously determined initial conditions and also generates dynamics that are in accord with the historical patterns of growth rates, capital flows, savings rates and labor supply. The alternative model is a generalized version of the neoclassical growth model, with increasing rates of intertemporal substitution due to a Stone-Geary type of utility.
Download or read book Why Doesn t Capital Flow from Rich to Poor Countries written by P. draig Belton and published by CRC Press. This book was released on 2017 with total page 107 pages. Available in PDF, EPUB and Kindle. Book excerpt: Robert Lucas is known among economists as one of the most influential macroeconomists of recent times--a reputation founded in no small part on the critical thinking skills displayed in his seminal 1990 paper 'Why Doesn';t Capital Flow from Rich to Poor Countries?'; Lucas's paper tackles a puzzle in economic theory that has since come to be known as the 'Lucas paradox, '; and it deploys the author';s brilliant problem solving skills to explain why such an apparent paradox in fact makes sense. Classical economic theory makes a simple prediction of how capital flows between countries: it should, it states, flow from rich to poor countries, because of the law of diminishing returns on capital. Since poor countries have so little capital invested in them, the returns on new investment should be proportionally far better than investment in rich countries. This should mean that investors seeking new opportunities will invest in poorer countries, making capital consistently flow from rich nations to poorer ones. But, problematically, this is not in fact the case. Having defined the problem, Lucas did what any good problem solver would: he looked critically at the criteria involved, and offered a series of possible solutions. Indeed, in just six pages, he puts forward four hypotheses to explain the paradox';s existence. The popularity of his paper, and the influence it has had, are also greatly magnified by careful reasoning embodied in Lucas's marshalling of evidence and his explanations of the judgements he has made."--Provided by publisher
Download or read book Patterns of International Capital Flows and Productivity Growth written by Margaux MacDonald and published by . This book was released on 2015 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent evidence from developing and emerging economies shows a negative correlation between growth and net capital inflows, a contradiction to neoclassical growth theory. I provide updated and disaggregated evidence on the origins of this puzzle. An analysis of the components of capital flows and of gross portfolio positions shows that foreign direct investment is directed towards countries with the highest growth rates, but that portfolio investment outflows exceed these inflows. Liberalized capital accounts further exacerbate this pattern. My results suggest a desire for international portfolio diversification in liquid assets by fast growing countries lies at the heart of the puzzle.
Download or read book Growth in Open Economies written by Sergio Rebelo and published by World Bank Publications. This book was released on with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Indivisibilities and Capital Market Imperfections in an Endogenous Growth Model written by Louis M. Chan and published by . This book was released on 1994 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Foreign Capital and Economic Growth in the First Era of Globalization written by Michael D. Bordo and published by . This book was released on 2007 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: We explore the association between economic growth and participation in the international capital market. In standard growth regressions, we find mixed evidence of any association between economic growth and foreign capital inflows. If there is an impact, it comes with a long lag and it is transitory having no impact on either the steady state or the short run growth rate. This suggests a view that there were long gestation lags of large fixed investments and it is also consistent with a neoclassical growth model. We also argue for a negative indirect channel via financial crises. These followed on the heels of large inflows and sudden stops of capital inflows often erasing the equivalent of several years of growth. We then take a balance sheet perspective on crises and explore other determinants of debt crises and currency crises including the currency composition of debt, debt intolerance and the role of political institutions. We argue that the set of countries that gained the least from capital flows in terms of growth outcomes in this period were those that had currency crises, foreign currency exposure on their national balance sheets, poorly developed financial markets and presidential political systems. Countries with credible commitments and sound fiscal and financial policies avoided major financial crises and achieved higher per capita incomes by the end of the period despite the potential of facing sudden stops of capital inflows, major current account reversals and currency crises that accompanied international capital markets free of capital controls.
Download or read book Why Does Capital Flow to Rich States written by Sebnem Kalemli-Ozcan and published by . This book was released on 2006 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The magnitude and the direction of net international capital flows does not fit neo-classical models. The 50 U.S. states comprise an integrated capital market with very low barriers to capital flows, which makes them an ideal testing ground for neoclassical models. We develop a simple frictionless open economy model with perfectly diversified ownership of capital and find that capital flows between the U.S. states are consistent with the model. Therefore, the small size and "wrong" direction of net international capital flows are likely due to frictions associated with national borders and not due to inherent flaws in the neoclassical model.
Download or read book International Capital Flows written by Martin Feldstein and published by University of Chicago Press. This book was released on 2007-12-01 with total page 500 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent changes in technology, along with the opening up of many regions previously closed to investment, have led to explosive growth in the international movement of capital. Flows from foreign direct investment and debt and equity financing can bring countries substantial gains by augmenting local savings and by improving technology and incentives. Investing companies acquire market access, lower cost inputs, and opportunities for profitable introductions of production methods in the countries where they invest. But, as was underscored recently by the economic and financial crises in several Asian countries, capital flows can also bring risks. Although there is no simple explanation of the currency crisis in Asia, it is clear that fixed exchange rates and chronic deficits increased the likelihood of a breakdown. Similarly, during the 1970s, the United States and other industrial countries loaned OPEC surpluses to borrowers in Latin America. But when the U.S. Federal Reserve raised interest rates to control soaring inflation, the result was a widespread debt moratorium in Latin America as many countries throughout the region struggled to pay the high interest on their foreign loans. International Capital Flows contains recent work by eminent scholars and practitioners on the experience of capital flows to Latin America, Asia, and eastern Europe. These papers discuss the role of banks, equity markets, and foreign direct investment in international capital flows, and the risks that investors and others face with these transactions. By focusing on capital flows' productivity and determinants, and the policy issues they raise, this collection is a valuable resource for economists, policymakers, and financial market participants.
Download or read book International Capital Mobility Public Investment and Economic Growth written by Richard H. Clarida and published by . This book was released on 1993 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents a neoclassical model of international capital flows, public investment, and economic growth. Because public capital is non-traded and is imperfectly substitutable for private capital, the open economy converges only gradually to the Solow steady-state notwithstanding the fact that international capital mobility is perfect. Along the convergence path, the economy initially runs a current account deficit that reflects a consumption boom and a surge in public spending. Over time, the rate of public investment declines as does the rate of growth in the standard measure of multifactor productivity in the private sector, the Solow residual.
Download or read book Capital Account Liberalization written by Peter Blair Henry and published by . This book was released on 2006 with total page 82 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Writings on the macroeconomic impact of capital account liberalization find few, if any, robust effects of liberalization on real variables. In contrast to the prevailing wisdom, I argue that the textbook theory of liberalization holds up quite well to a critical reading of this literature. The lion's share of papers that find no effect of liberalization on real variables tell us nothing about the empirical validity of the theory, because they do not really test it. This paper explains why it is that most studies do not really address the theory they set out to test. It also discusses what is necessary to test the theory and examines papers that have done so. Studies that actually test the theory show that liberalization has significant effects on the cost of capital, investment, and economic growth"--National Bureau of Economic Research web site.
Download or read book The Determinants of Cross border Equity Flows written by Richard Portes and published by . This book was released on 2000 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: We apply a new approach to a new panel data set on bilateral gross cross-border equity flows between 14 countries, 1989-96. The model integrates elements of the finance literature on portfolio composition and the international macroeconomics and asset trade literature. Gross asset flows depend on market size in both source and destination country as well as trading costs, in which both information and the transaction technology play a role. Distance proxies some information costs, and other variables explicitly represent information transmission, an information asymmetry between domestic and foreign investors, and the efficiency of transactions. The remarkably good results have strong implications for theories of asset trade. We find that the geography of information is the main determinant of the pattern of international transactions, while there is little support in our data for diversification and return-chasing motives for transactions."--Authors.
