Countries with weaker domestic institutions hold fewer foreign assets and exhibit concentrated corporate ownership. An equilibrium business cycle model of international capital flows with corporate governance frictions between outside investors and insiders explains both phenomena. Investment...

The paper examines a modified real business cycle model of a small open economy such as the Korean economy. The model economy is assumed to produce output with two types of capital: traded capital and non-traded capital. Domestic individuals can borrow from the world capital market only by using...

Countries with weaker domestic institutions hold fewer foreign assets and exhibit concentrated corporate ownership. An equilibrium business cycle model of international capital flows with corporate governance frictions between outside investors and insiders explains both phenomena. Investment...

Credit booms have globally fuelled hikes in stock, raw material and real estate markets which have culminated in the recent US subprime market crisis. We explain the global asset market booms since the mid 1980s based on the overinvestment theories of Hayek, Wicksell and Schumpeter. We argue...