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We use the neoclassical growth framework to model international capital flows in an economy with exogenous demographic change. We compare model implications and actual current account data and find that the model explains a small but significant fraction of capital flows between OECD countries,...
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This paper examines aggregate savings in a general equilibrium model where infinitely lived households face volatile … when income is constant. This additional capital accumulation has sometimes been interpreted as precautionary savings, but … I demonstrate that it is mostly generated by permanent-income motives. -- equilibrium interest rate ; aggregate savings …
Persistent link: https://www.econbiz.de/10002679474
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This paper explores how international capital movements affected the domestic money supply. This requires that the causality at work in the adjustment process be analyzed. For this purpose, series of central bank reserves, the monetary base, the money supply and the balance of payments were...
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This paper shows that geographical investor heterogeneity strongly influences sovereign risk. While standard sovereign debt models mainly attribute the absence of sovereign defaults to foreign creditor retaliation, a new theoretical literature argues that domestic creditors also affect borrowing...
Persistent link: https://www.econbiz.de/10002577962