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Article dans une revue

Why Does Capital Flow to Rich States?

Abstract : The magnitude and the direction of net international capital flows do not fit neoclassical models. The fifty U.S. states comprise an integrated capital market with very low barriers to capital flows, which makes them an ideal testing ground for neoclassical models. We develop a simple frictionless open economy model with perfectly diversified ownership of capital and find that capital flows among the states are consistent with the model. Therefore, the small size and “wrong” direction of net international capital flows are likely due to frictions associated with national borders, not to inherent flaws in the neoclassical model.
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Contributeur : Ariell Reshef <>
Soumis le : mardi 17 janvier 2017 - 13:36:54
Dernière modification le : mardi 28 avril 2020 - 10:42:29


  • HAL Id : hal-01437589, version 1



Ariell Reshef, Bent, E. Sorensen, Oved Yosha, Kalemli-Ozcan Sebnem. Why Does Capital Flow to Rich States?. Review of Economics and Statistics, Massachusetts Institute of Technology Press (MIT Press), 2010, 92 (4), pp.769-783. ⟨hal-01437589⟩



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