benchmark calibration, we estimate that the capital misallocation induced by these barriers reduces World GDP by 7%, compared to … a situation without barriers. We also find that barriers to global capital allocation contribute significantly to cross …-country inequality: the standard deviation of log capital per employee is 80% higher than it would be in a world without barriers to …

reconcile with frictionless capital markets. In this paper, we develop a theory of international capital allocation: a multi … reduce world output by almost 7% and account for nearly half of the observed cross-country differences in capital stock per …