Capital flows with low intensity and flows to middle-income countries. Physical and human capital alone cannot explain this pattern. I present a model to show how managerial ability - the ability to run risky projects - can increase total factor productivity and explain the pattern of capital...

Contrary to the prediction of benchmark neoclassical models, growth accelerations in developing countries tend to be associated with current account improvements, resulting from larger increases in saving than in investment. I argue that this can be driven by the behavior of entrepreneurs facing...

Panel data for individual Chinese provinces from 1980 to 2007 was used to estimate the saving-investment model used by Feldstein and Horioka (1980), shed light on changes to China's domestic capital mobility since the adoption of the Open Door Policy, and determine whether there has been any...

The purpose of this paper is to set out a surprisingly simple solution to the Feldstein-Horioka Puzzle or Paradox, which is that even though global financial markets appear to be integrated, levels of saving and investment are correlated across countries because financial markets cannot, by...

Martin Stuart ("Marty") Feldstein, currently George F. Baker Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research, Inc. (NBER), is a renowned American economist who has made important contributions to public finance, macroeconomics,...

Martin Stuart ("Marty") Feldstein, currently George F. Baker Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research, Inc. (NBER), is a renowned American economist who has made important contributions to public finance, macroeconomics,...

Martin Stuart (“Marty”) Feldstein, currently George F. Baker Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research, Inc. (NBER), is a renowned American economist who has made important contributions to public finance, macroeconomics,...

Martin Stuart ("Marty") Feldstein, currently George F. Baker Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research, Inc. (NBER), is a renowned American economist who has made important contributions to public finance, macroeconomics,...

In this paper, we show that Adam Smith pointed out the existence of the Feldstein-Horioka Paradox or Puzzle and even gave an explanation for it more than 200 years before the publication of Feldstein and Horioka (1980). Smith argues that it is the pursuit of their own security that leads owners...

The purpose of this paper is to set out a surprisingly simple solution to the Feldstein-Horioka Puzzle or Paradox, which is that even though global financial markets appear to be integrated, levels of saving and investment are correlated across countries because financial markets cannot, by...