Are international borders barriers to capital flows? We use evidence on net capital flows among regions within a country as a benchmark. For this purpose we develop a data set of saving and investment rates of Japanese prefectures. We find that the correlation between saving and investment rates...

We develop a new theory of international capital flows based on dispersed information across individual investors. There is extensive evidence of information heterogeneity within and across countries, which has proven critical to understanding asset price behavior. We introduce information...