Capital flows to developing countries : is there an allocation puzzle? / by Josef Schroth.: FB3-5/2016-53E-PDF
"Foreign direct investment inflows are positively related to growth across developing countries—but so are savings in excess of investment. I develop an explanation for this well-established puzzle by focusing on the limited availability of consumer credit indeveloping countries together with general equilibrium effects. In my model, fast-growing developing countries increase their holdings of safe assets, which creates net capital outflows despite inflows of foreign direct investment. The world risk-free interest rate falls as a result, and slow-growing developing countries reduce their holdings of safe assets, which creates net capital inflows despite outflows of foreign direct investment"--Abstract.
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| Department/Agency | Bank of Canada. |
|---|---|
| Title | Capital flows to developing countries : is there an allocation puzzle? / by Josef Schroth. |
| Series title | Staff Working Paper, 1701-9397 ; 2016-53 |
| Publication type | Series - View Master Record |
| Language | [English] |
| Format | Electronic |
| Electronic document | |
| Note(s) | "November 2016." Includes bibliographical references. Abstract in French. |
| Publishing information | [Ottawa] : Bank of Canada, c2016. |
| Author / Contributor | Schroth, Josef. |
| Description | ii, 21 p. |
| Catalogue number |
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| Subject terms | Developing countries Foreign investments International markets |
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