International Capital Mobility in the 1990s

Capital Mobility and Capital Tax Competition

“…Second, barriers to international capital flows have declined significantly over time and have been accompanied by widespread deregulation of financial markets and dramatic advances in information and communication technology-factors that have operated to increase international capital mobility (Feldstein and Bacchetta, 1991;Coakley, Kulasi and Smith, 1998). Finally, the empirical evidence is generally consistent with perfect capital mobility in the sense that interest rates on deposits of the same maturity and risk characteristics and expressed in the same national currency tend to be equalized (Frankel, 1993;Obstfeld, 1995). However, Obstfeld (1995) also notes that little has been learned about international capital mobility from cross-country comparisons of rates of return on assets in different currencies, as such returns incorporate expected changes in exchange rates as well as an exchange-rate risk premium, and that the empirical evidence in general does not support uncovered interest rate parity under these circumstances (Frankel, 1993;Smallwood and Norrbin, 2008).…”

“…Finally, the empirical evidence is generally consistent with perfect capital mobility in the sense that interest rates on deposits of the same maturity and risk characteristics and expressed in the same national currency tend to be equalized (Frankel, 1993;Obstfeld, 1995). However, Obstfeld (1995) also notes that little has been learned about international capital mobility from cross-country comparisons of rates of return on assets in different currencies, as such returns incorporate expected changes in exchange rates as well as an exchange-rate risk premium, and that the empirical evidence in general does not support uncovered interest rate parity under these circumstances (Frankel, 1993;Smallwood and Norrbin, 2008). The implications of these empirical results are discussed in more detail below.…”

“…Moreover, Obstfeld (1995) argues that this resolution of the FH puzzle is incomplete, since persistence in savings-investment correlations implies persistent changes in exchange rates. In addition, one would expect differentials in real interest rates attributable to currency risks to decline over time, given the availability and increasing use of financial derivatives to hedge such risks.…”

¿Se está rompiendo el mercado español? Una aplicación del enfoque de Feldstein-Horioka

“…Por ello, se convirtió en uno de los enigmas o "puzles" más debatidos en economía internacional (Obstfeld y Rogoff, 2000) e impulsó una línea de investigación que aún se mantiene activa. Los trabajos de Tesar (1991), Obstfeld (1993), Coakley et al (1998) Las reacciones a la conclusión "fuerte" de F-H podrían resumirse en dos líneas de trabajo diferentes. Por un lado, un grupo de autores negaron que ␤ pudiera considerarse una medida válida de la movilidad internacional del capital.…”

“…1971-1975OLS 1976-19801981-1985Thomas (1993) UK Panel 1971-1987Canadá Panel 1961-1989Yamori (1995) Japón OLS 1970-1974Media período 1975-19791980-1985Dekle (1996) Japón OLS 1975-1988Media período 1975-19791980-19841985-1988 Iwamoto y Van Wincoop (2000) Japón OLS. Media período 1975-19801980-19851985-1990Series temporales 1975-1990Hellyiwell y Mckitrick (1999) Canadá OLS 1961-1993Media período 1961-19711983-1993 Van Wincoop (2000) Japón Panel 1970-1990…”