Standard open economy macro models with unemployment predict a contractionary short-run effect of international capital inflows. Empirical evidence, on the other hand, often associates such inflows with short-term booms, and developing country policy makers frequently go out of their way to...

We study the extent to which countries undergo structural change during and after episodes of sustained investment surges. In particular, we explore the evolution of trade flows, considering (i) exports sophistication or complexity, (ii) exports diversification, and (iii) capital goods imports....