Financial Integration, Entrepreneurial Risk and Global Dynamics PDF Download

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Financial Integration, Entrepreneurial Risk and Global Dynamics

Financial Integration, Entrepreneurial Risk and Global Dynamics PDF Author: George-Marios Angeletos
Publisher: DIANE Publishing
ISBN: 1437980244
Category : Reference
Languages : en
Pages : 42

Book Description
How does financial integration impact capital accumulation, current-account dynamics, and cross-country inequality? This paper investigates this question within a two-country, general-equilibrium, incomplete-markets model that focuses on the importance of idiosyncratic entrepreneurial risk -- a risk that introduces, not only a precautionary motive for saving, but also a wedge between the interest rate and the marginal product of capital. This friction provides a simple resolution to the empirical puzzle that capital often fails to flow from the rich or slow-growing countries to the poor or fast-growing ones, and a distinct set of policy lessons regarding the intertemporal costs and benefits of capital-account liberalization. Illus. A print on demand report.
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