Patterns of international capital flows and their implications for developing countries

Arbeitspapier

According to a standard economic theory, capital should flow from rich capital-abundant countries to poor capital-scarce countries. However, a reverse pattern has prevailed in the world economy. This is the so-called Lucas paradox. In addition, it has been shown that counterintuitively there is negative correlation between capital inflow and productivity growth across developing countries. This is the so-called allocation puzzle. This survey attempts to shed light on the following questions: 1) What are the patterns of international capital flows in the world economy? 2) What are the most plausible explanations for these patterns? 3) What are the possible implications of these developments for developing countries?

Object Details

• ISBN: 978-92-9256-397-4
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Working Paper ; No. 2017/171

Classification and Topics

• Classification: Wirtschaft ; International Investment; Long-term Capital Movements ; Open Economy Macroeconomics
• Subject: international capital flows ; Lucas paradox ; allocation puzzle

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Nieminen, Mika
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2017

Further information

• DOI: doi:10.35188/UNU-WIDER/2017/397-4
• Handle: http://hdl.handle.net/10419/190016
• Last update: 10.03.2025, 11:45 AM CET