Two-way Capital Flows and Global Imbalances

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• 作者：Pengfei Wang ; Yi Wen and Zhiwei Xu
• 刊名：The Economic Journal
• 出版年：2017
• 出版时间：February 2017
• 年：2017
• 卷：127
• 期：599
• 页码：229-269
• 全文大小：528K
• ISSN：1468-0297

文摘

This article shows how underdeveloped financial markets in emerging economies can explain the pattern of two-way capital flows between emerging economies (such as China) and the developed world (such as the United States). Our calibrated model reproduces China's rising financial capital outflows and FDI inflows as well as its massive trade imbalances in recent decades. Our model also predicts that global trade imbalances may be sustainable even in the long run and the conventional wisdom that the ‘saving glut’ of emerging economies is responsible for the global low interest rate may be wrong.