Financial Development, International Capital Flows, and Aggregate Output

• Main Authors: von Hagen, Jürgen, ZHANG, Haiping
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2013
• Subjects: Capital account liberalization; financial development; foreign direct investment; symmetry breaking; Finance; International Economics
• Online Access: https://ink.library.smu.edu.sg/soe_research/1488; https://ink.library.smu.edu.sg/context/soe_research/article/2487/viewcontent/seminar20121101.pdf
• Institution: Singapore Management University

We develop a tractable two-country overlapping-generations model and show that cross-country differences in financial development can explain three recent empirical patterns of international capital flows: Financial capital flows from relatively poor to relatively rich countries, while foreign direc...