Trends and Cycles in Foreign Lending

Eichengreen, Barry

doi:10.3386/w3411

Cited by 32 publications

(35 citation statements)

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“…As is evident from figure 51Bayoumi (1990) finds no cross-sectional saving-investment association for a smaller eight-country sample over any subperiod of 1880-1913. Eichengreen (1990) 10, Canada and the U.K. are behind the poor fit of the 1900-13 regression. Table 8 There are, moreover, differences between regions and countries that 53Murphy (1984) applied a similar idea to the 143 largest industrial corporations from the 1981 Fortune 500.…”

Section: Cardia (1992) Describes a Simulation Model Which Is Based Onmentioning

confidence: 99%

International Capital Mobility in the 1990s

Obstfeld

1993

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Section: Cardia (1992) Describes a Simulation Model Which Is Based Onmentioning

confidence: 99%

International Capital Mobility in the 1990s

Obstfeld

1993

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“…The presence of a risk premium iatroçluces an additional channel through which shifts in consumption preferences can influence investment behavior. We discuss later the interpretation of (35) when shares in domestic firms are traded internationally.…”

Section: /3(1+rgj)mentioning

confidence: 99%

“…The equality breaks down here because future short rates are stochastic, whereas Rf, is known on date t. Eq. (35) shows that the firm's value is the conventional present value of dividends plus a risk premiurn the firm is valued more highly if it pays out unexpectedly high dividends when the marginal utility of owners' consumption is unexpectedly high. The presence of a risk premium iatroçluces an additional channel through which shifts in consumption preferences can influence investment behavior.…”

Section: /3(1+rgj)mentioning

confidence: 99%

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The Intertemporal Approach to the Current Account

Obstfeld¹,

Rogoff²

1994

258

266

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The intertemporal approach views the current-account balance as the outcome of forwardlooking dynamic saving and investment decisions. This paper, a chapter in the forthcoming third volume of the Handbook of International Economics, surveys the theory and empirical work on the intertemporal approach as it has developed since the early 1980s. After reviewing the basic one-good, representative-consumer model, the paper considers a series of extended models incorporating relative prices, complex demographic structures, consumer durables, asset-market incompleteness, and asymmetric information. We also present a variety of empirical evidence illustrating the usefulness of the intertemporal approach, and argue that intertemporal models provide a consistent and coherent foundation for open-economy policy analysis. As such, the intertemporal approach should supplant the expanded versions of the Mundell-Fleming IS-LM model that currently furnish the dominant paradigm used by central banks, finance minisuies, and international economic agencies.

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“…This appears to be 5See Eichengreen (1990) on the role of political risk in reducing cross-country capital flows in the period between the two wars.…”

Section: Reconciling Capital Mobility and High Saving Retention Ratesmentioning

confidence: 99%

International Capital Flows

Feldstein¹

1999

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Although capital is now generally free to move across national borders, there is strong evidence that savings tend to remain and to be invested in the countiy where the saving takes place. The current paper examines the apparent conflict between the potential mobility of capital and 'the observed de facto segmentation of the global capital market The key to reconciling this "Feldstein-Horioka paradox" is that, although capital is free to move, its owners, and especially the agents who are responsible for institutional investments, prefer to keep funds close to home because of a combination of risk aversion, ignorance and a desire to show prudence in their investing behavior.The paper presents evidence on the capital mobility and on capital market segmentation.The role of hedging and the difference between gross and net capital movements for individual investors and borrowers are discussed. The special place of foreign direct investment is also considered.The segmentation of the global capital market affects the impact of capital income taxes and subsidies. This is discussed in the fmal section of the paper. An occasion like this is a pleasant way of linking one generation to the next within the economics profession. The fifteen recipients of the Harms prize since it was established in 1964 include the man with whom I first studied international economics, Sir Roy Harrod of Oxford, who received the prize in 1966 while I was a graduate student in Oxford. A few years later, the prize went to Wassily Leontief and then to Gottfried Haberler, both of whom were active members of the Harvard Economics department that I had just joined. So it is a special pleasure and indeed a great honor to have been included with these men in the group that the Kiel Institute has honored.As you know, the Harms prize is based on contributions to international economics while my own research over the years has focused on the economics of the public sector, especially the problems of taxation, government spending and social insurance. Most research in public *professor of Economics, Harvard University and President of the National Bureau of Economic Research. These remarks were presented as the Bernhard Harms Prize Lecture on June 24, 1994 in Kid, Germany. I am grateflul to Todd Sinai for help with the statistical estimates presented in section 2 of this paper and to Kathryn Dominguez, Jefiuey Frankel and Kenneth Froot for comments on an earlier draft kiel.082494 economics, including my own, focuses on microeconomic issues: how public policies affect the behavior of households and firms and how to design policies that lead to preferred outcomes.However, much of my own work has been motivated by aggregate national issues like the causes of high unemployment, the impact of inflation, and the determinants and consequences of aggregate capital formation.It was my research on the link between public policies and domestic capital formation that led me to deal with explicitly international issues. About twenty years ago, I began to worry...

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Trends and Cycles in Foreign Lending

Cited by 32 publications

References 7 publications

International Capital Mobility in the 1990s

International Capital Mobility in the 1990s

The Intertemporal Approach to the Current Account

International Capital Flows

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