Why Does Capital Flow from Equal to Unequal Countries?
Capital flows from equal to unequal countries. We find this to be true in both advanced and in emerging economies, and we find this result to be largely driven by private savings. We introduce a model that can rationalize this fact: more unequal countries endogenously develop deeper financial markets. These markets, in turn, allow households in unequal countries to borrow more, hence the observed direction of capital flows.
Date:
22 October 2020, 13:00 (Thursday, 2nd week, Michaelmas 2020)
Venue:
Held on Zoom
Speaker:
Federica Romei (University of Oxford)
Organising department:
Department of Economics
Part of:
Department of Economics Seminar
Booking required?:
Not required
Audience:
Members of the University only
Editor:
Melis Clark
