A Solution to Two Paradoxes of International Capital Flow

Author/creator Wei, Shang-Jin Author
Other author Ju, Jiandong Author
Format Electronic
Publication InfoWashington : International Monetary Fund
Description119 p.
Supplemental ContentFull text available from Ebook Central - Academic Complete

Summary Annotation International capital flows from rich to poor countries can be regarded as either too low (the Lucas paradox in a one-sector model) or too high (when compared with the logic of factor price equalization in a two-sector model). to resolve the paradoxes, we introduce a non-neoclassical model which features financial contracts and firm heterogeneity. In our model, free patterns of gross capital flow emerge as a function of the quality of the financial system and the level of protection for property rights(i.e., the risk of expropriation. a poor country with an inefficient financial system but a low expropriation risk may simultaneously experience an outflow of financial capital but an inflow of foreign direct investment (FDI), resulting in a small net flow.
Access restrictionAvailable only to authorized users.
Technical detailsMode of access: World Wide Web
Genre/formElectronic books.
ISBN9781451987973
ISBN1451987978 (E-Book) Active Record
Stock number00013468

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