Article ID Journal Published Year Pages File Type
962330 Journal of International Economics 2013 16 Pages PDF
Abstract
► We perform a capital flow accounting exercise using the neoclassical growth model. ► The standard model is slightly extended to account for investment risk. ► This extension explains the positive correlation between capital outflows and growth. ► The capital wedge (distortions on the return to capital) is key to obtain this result. ► Global imbalances can be explained by the relatively low capital wedge in Asia.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
Authors
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