correlation. Moreover, empirical evidence documents large differences in capital utilization rates across countries and a positive … correlation between capital utilization and per capita income as well as between depreciation and long-term average per capita … income growth. Both standard exogenous and endogenous growth models, however, assume that capital services are a constant …

When dealing with credit booms driven by capital inflows, monetary authorities in emerging markets are often reluctant … to raise interest rates, as they fear that an increase attracts even more capital and appreciates the currency. A number …