1.

Record Nr.

UNINA9910956118703321

Autore

Wei Shang-Jin

Titolo

A Solution to Two Paradoxes of International Capital Flows / / Shang-Jin Wei, Jiandong Ju

Pubbl/distr/stampa

Washington, D.C. : , : International Monetary Fund, , 2006

ISBN

9786613824103

9781462309443

1462309445

9781452742069

1452742065

9781283511650

1283511657

9781451987973

1451987978

Edizione

[1st ed.]

Descrizione fisica

1 online resource (39 p.)

Collana

IMF Working Papers

Altri autori (Persone)

JuJiandong

Soggetti

Capital movements - Mathematical models

International finance

Balance of trade

Capital flows

Capital movements

Commercial policy

E-Commerce

Exports and Imports

Finance

Foreign direct investment

Income economics

International economics

International Investment

International Trade Organizations

Investments, Foreign

Labor Demand

Labor

Labour

Long-term Capital Movements

Retail and Wholesale Trade

Self-employed

Self-employment



Trade in goods

Trade liberalization

Trade Policy

United States

Lingua di pubblicazione

Inglese

Formato

Materiale a stampa

Livello bibliografico

Monografia

Note generali

"July 2006."

Nota di contenuto

""Contents""; ""I. Introduction""; ""II. Paradoxes of International Capital Flows""; ""III. The Model""; ""IV. Aggregation and Equilibrium Conditions""; ""V. Comparative Statics""; ""VI. Free Trade and Capital Flows""; ""VII. Conclusions""; ""Appendix: Proofs""

Sommario/riassunto

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.