Presented By: Department of Economics
Michael Beauregard Seminar in Macroeconomics: Why does capital flow from equal to unequal countries?
Federica Romei, Oxford
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Abstract:
Capital flows from equal to unequal countries. We document this empirical regularity in a large sample of advanced economies. The capital flows are largely driven by private savings. We propose a theory that can rationalize these findings: more unequal countries endogenously develop deeper financial markets. Households in unequal counties, in turn, borrow more, driving the observed direction of capital flows.
* To join the seminar, please contact at econ.events@umich.edu
Capital flows from equal to unequal countries. We document this empirical regularity in a large sample of advanced economies. The capital flows are largely driven by private savings. We propose a theory that can rationalize these findings: more unequal countries endogenously develop deeper financial markets. Households in unequal counties, in turn, borrow more, driving the observed direction of capital flows.
* To join the seminar, please contact at econ.events@umich.edu
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