Capital flows to developing countries: The allocation puzzle

Review of Economic Studies

Volumn 80, Issue 4, 2013, Pages 1484-1515

  Gourinchas, Pierre Olivier ^a   Jeanne, Olivier ^b  

^a UNIVERSITY OF CALIFORNIA   (United States)

^b JOHNS HOPKINS UNIVERSITY   (United States)

Author keywords

Capital flows; Growth; Productivity

Indexed keywords

CAPITAL FLOW; DEVELOPING WORLD; ECONOMIC DEVELOPMENT; ECONOMIC GROWTH; NEOCLASSICAL THEORY; PRODUCTIVITY;

EID: 84886291495     PISSN: 00346527     EISSN: 1467937X     Source Type: Journal    
DOI: 10.1093/restud/rdt004     Document Type: Article

References (46)

1. AGHION, P., COMIN, D. and HOWITT, P. (2006), "When does Domestic Saving Matter for Economic Growth?" (Working Paper 12275, NBER).
2. AGUIAR, M. and AMADOR, M. (2011), "Growth in the Shadow of Expropriation", Quarterly Journal of Economics, 126, 651-697.
3. AGUIAR, M. and GOPINATH, G. (2007), "Emerging Market Business Cycles: The Cycle is the Trend", Journal of Political Economy, 115, 69-102.
4. AIZENMAN, J., PINTO, B. and RADZIWILL, A. (2007), "Sources for Financing Domestic Capital - is Foreign Saving a Viable Option for Developing Countries?", Journal of International Money and Finance, 26, 682-702.
5. ALFARO, L., KALEMLI-OZCAN, S. and VOLOSOVYCH, V. (2012), "Sovereigns, upstream capital flows and global imbalances" (Mimeo, University of Maryland, December).
6. ANGELETOS, G.-M. and PANOUSI, V. (2011), "Financial Integration, Entrepreneurial Risk and Global Dynamics", Journal of Economic Theory, 146, 863-896.
7. BARRO, R. J. and SALA-I-MARTIN, X. (1995), Economic Growth (New-York: McGraw Hill).
8. BENHIMA, K. (2012), "AReappraisal of theAllocation Puzzle Through the PortfolioApproach", Journal of International Economics, (forthcoming).
9. CABALLERO, R. J., FARHI, E. and GOURINCHAS, P.-O. (2008), "An Equilibrium Model of "Global Imbalances" and Low Interest Rates", American Economic Review, 98, 358-393.
10. CARROLL, C. and JEANNE, O. (2009), "A Tractable Model of Precautionary Reserves or Net Foreign Assets" (Manuscript, Johns Hopkins University).
11. CARROLL, C. D., OVERLAND, J. and WEIL, D. N. (2000), "Saving and Growth with Habit Formation", American Economic Review, 90, 341-355.
12. CARROLL, C. D. and SUMMERS, L. H. (1991), "Consumption Growth Parallels Income Growth: Some New Evidence", in Bernheim,B. and Shoven, J. B. (eds) National Savings and Economic Performance (Chicago: Chicago University Press) 305-348.
13. CARROLL, C. D. and WEIL, D. N. (1994), "Saving and Growth: A Reinterpretation", in Carnegie-Rochester Series on Public Policy, pp. 133-192.
14. CASELLI, F. (2005), "Accounting for Cross-Country Income Differences", in Aghion, P. and Durlauf, S. N. (eds) Handbook of Economic Growth, Vol. 1, Part 1 (Elsevier) 679-741.
15. CASELLI, F. and FEYRER, J. (2007), "The Marginal Product of Capital", Quarterly Journal of Economics, 122, 535-568.
16. CHAMON, M. D. and PRASAD, E. S. (2010), "Why are Saving Rates of Urban Households in China Rising?" American Economic Journal: Macroeconomics, 2, 93-130.
17. CHARI, V. V., KEHOE, P. J. and MCGRATTAN, E. R. (1996), "The Poverty of Nations: A Quantitative Exploration" (NBERWorking Paper 5414, National Bureau of Economic Research).
18. CHARI,V.V., KEHOE, P. J. andMCGRATTAN, E. R. (2007), "Business CycleAccounting", Econometrica, 75, 781-836.
19. CHINN, M. D. and ITO, H. (2008), "A New Measure of Financial Openness", Journal of Comparative Policy Analysis, 10, 309-322.
20. DOOLEY, M., FOLKERTS-LANDAU, D. and GARBER, P. (2004a), "The Revived Bretton Woods System", International Journal of Finance & Economics, 9, 307-313.
21. DOOLEY, M., FOLKERTS-LANDAU, D. and GARBER, P. M. (2004b), "The U.S. Current Account Deficit and Economic Development: Collateral for a Total Return Swap". (NBER Working Papers 10727, National Bureau of Economic Research, Inc).
22. DURDU, C. B., MENDOZA, E. G. and TERRONES, M. E. (2009), "Precautionary Demand for Foreign Assets in Sudden Stop Economies: an Assessment of the New Merchantilism", Journal of Development Economics, 89, 194-209.
23. EATON, J. and KORTUM, S. (1999), "International Technology Diffusion: Theory and Measurement", International Economic Review, 40, 537-570.
24. FELDSTEIN, M. and HORIOKA, C. (1980), "Domestic Saving and International Capital Flows", Economic Journal, 90, 314-329.
25. GERTLER, M. J. and ROGOFF, K. (1990), "North-south Lending and Endogenous Domestic Capital Market Inefficiencies", Journal of Monetary Economics, 26, 245-266.
26. GOURINCHAS, P.-O. and JEANNE, O. (2006), "The Elusive Gains from International Financial Integration", Review of Economic Studies, 73, 715-741.
27. GOURINCHAS, P.-O. and JEANNE, O. (2007), "Capital Flows to Developing Countries: the Allocation Puzzle". (NBER Working Papers 13602, National Bureau of Economic Research).
28. GOURINCHAS, P.-O. and PARKER, J. A. (2002), "Consumption over the Life Cycle", Econometrica, 70, 47-89.
29. HALL, R. and JONES, C. (1999), "Why do Some Countries Produce so much more Output per Worker than Others?" Quarterly Journal of Economics, 114, 83-116.
30. HESTON, A., SUMMERS, R. andATEN, B. (2004), Penn world table version 6.1. Center for International Comparisons at the University of Pennsylvania (CICUP).
31. HSIEH, C.-T. and KLENOW, P. J. (2007), "Relative Prices and Relative Prosperity", American Economic Review, 97, 562-585.
32. KING, R. and REBELO, S. (1993a), "Low Frequency Filtering and Real Business Cycles", Journal of Economics Dynamics and Control, 17, 207-231.
33. KING,R. and REBELO, S. (1993b), "Transitional Dynamics and Economic Growth in the Neoclassical Model", American Economic Review, 83, 908-931.
34. LANE, P. and MILESI-FERRETTI, G. M. (2007), "The External Wealth of Nations Mark II: Revised and Extended Estimates of Foreign Assets and Liabilities,1970-2004", Journal of International Economics, 73, 223-250.
35. LUCAS, R. E. J. (1990), "Why doesn't Capital Flow from Rich to Poor Countries?" American Economic Review, 80, 92-96.
36. MANKIW, N. G., ROMER, D. and WEIL, D. (1992), "A Contribution to the Empirics of Economic Growth", Quarterly Journal of Economics, 107, 407-438.
37. MANZOCCHI,S. andMARTIN, P. (1997), "Are Capital Flows Consistent with the Neoclassical Growth Model? Evidence from a Cross-section of Developing Countries", Economie Internationale, 72, 7-24.
38. MATSUYAMA, K. (2004), "Financial Market Globalization, Symmetry-Breaking, and Endogenous Inequality of Nations", Econometrica, 72, 853-884.
39. MENDOZA, E. G., QUADRINI, V. and RÌOS-RULL, J.-V. (2009), "Financial Integration, Financial Development, and Global Imbalances", Journal of Political Economy, 117, 371-416.
40. MODIGLIANI, F. (1970), "The Life Cycle Hypothesis of Savings and Intercountry Differences in the Savings Ratio", in Scott, J. V. M. FG. and Eltis, W. (eds) Induction, Growth and Trade. Essays in Honor of Sir Roy Harrod (Oxford: Clarendon Press) 197-225.
41. PARENTE, S. and PRESCOTT, E. (2000), Barriers to Riches (Cambridge, MA: MIT Press).
42. PRASAD, E., RAJAN, R. and SUBRAMANIAN,A. (2007), "Foreign Capital and Economic Growth", Brookings Papers on Economic Activity, 1, 153-230.
43. RAJAN, R. G. and SUBRAMANIAN, A. (2008), "Aid and Growth: What does the Cross-Country Evidence Really Show?" The Review of Economics and Statistics, 90, 643-665.
44. RODRIK, D. (2008), "The Real Exchange Rate and Economic Growth", Brookings Papers on Economic Activity, 39, 365-439.
45. SANDRI, D. (2010), "Growth and Capital Flows with Risky Entrepreneurship". (IMFWorking Papers 10/37, International Monetary Fund).
46. SONG, Z., STORESLETTEN, K. and ZILIBOTTI, F. (2011), "Growing like China", The American Economic Review, 101, 196-233.