Capital Flows, Saving, and Investment in the World Economy

Capital Flows, Saving, and Investment in the World Economy
ISBN-10
0815330731
ISBN-13
9780815330738
Category
Business & Economics
Pages
200
Language
English
Published
1998
Publisher
Taylor & Francis
Author
Showkat Ali

Description

This study examines the major macroeconomic determinants and the structural relationships of current account variability, capital flows, saving and investment in open economies that are linked to the international financial markets. It explores the appropriateness of domestic policy responses (such as money stock growth, government spending, openness criteria, GDP growth) and the size of population or the impact of external shocks (such as exchange rate variability and the terms of trade uncertainty) for determining the domestic saving-investment comovement and capital flows worldwide. This analysis finds that even high positive correlations between national saving and investment rates could naturally arise within a perfect capital mobility framework where domestic policy variability and external shocks are likely to play a significant role for capital inflow.

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