International Capital Flows and Aggregate Output

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dc.contributor.author Zhang, Haiping en
dc.contributor.author von Hagen, Juergen en
dc.coverage.spatial Denver en
dc.date.accessioned 2020-01-12T22:35:13Z en
dc.date.issued 2011-01-08 en
dc.identifier.uri http://hdl.handle.net/2292/49558 en
dc.description.abstract We develop a tractable multi-country overlapping-generations model and show that cross-country differences in financial development explain three recent empirical patterns of international capital flows. Domestic financial frictions in our model distort interest rates and aggregate output in the less financially developed countries. International capital flows help ameliorate the two distortions. International flows of financial capital and foreign direct investment affect aggregate output in each country directly through affecting the size of aggregate investment. In addition, they affect aggregate output indirectly through affecting the composition of aggregate investment and the size of aggregate savings. Under certain conditions, the indirect effects may dominate the direct effects so that, despite “uphill” net capital flows, full capital mobility may raise the steady-state aggregate output in the poor country as well as raise world output. However, if foreign direct investment is restricted, \uphill" financial capital flows strictly reduce the steady-state aggregate output in the poor countries and it is more likely that the steady-state world output is lower than under international financial autarky. en
dc.relation.ispartof 2011 North American Winter Meeting of the Econometric Society en
dc.rights Items in ResearchSpace are protected by copyright, with all rights reserved, unless otherwise indicated. Previously published items are made available in accordance with the copyright policy of the publisher. en
dc.rights.uri https://researchspace.auckland.ac.nz/docs/uoa-docs/rights.htm en
dc.title International Capital Flows and Aggregate Output en
dc.type Conference Item en
dc.rights.holder Copyright: The author en
pubs.author-url https://www.econometricsociety.org/meetings/schedule/2011/01/07/north-american-winter-meeting en
pubs.finish-date 2011-01-09 en
pubs.start-date 2011-01-07 en
dc.rights.accessrights http://purl.org/eprint/accessRights/RestrictedAccess en
pubs.subtype Conference Paper en
pubs.elements-id 786863 en
pubs.org-id Business and Economics en
pubs.org-id Economics en
pubs.record-created-at-source-date 2019-11-26 en


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