Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:88:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/views.module\";s:5:\"%line\";i:879;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/productivity-growth-and-capital-flows-dynamics-reforms', '', '54.36.148.126', 1602555551) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:134:\"Declaration of views_handler_filter::options_validate() should be compatible with views_handler::options_validate($form, &$form_state)\";s:5:\"%file\";s:109:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/handlers/views_handler_filter.inc\";s:5:\"%line\";i:589;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/productivity-growth-and-capital-flows-dynamics-reforms', '', '54.36.148.126', 1602555551) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:130:\"Declaration of views_handler_filter::options_submit() should be compatible with views_handler::options_submit($form, &$form_state)\";s:5:\"%file\";s:109:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/handlers/views_handler_filter.inc\";s:5:\"%line\";i:589;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/productivity-growth-and-capital-flows-dynamics-reforms', '', '54.36.148.126', 1602555551) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:151:\"Declaration of views_handler_filter_term_node_tid::value_validate() should be compatible with views_handler_filter::value_validate($form, &$form_state)\";s:5:\"%file\";s:131:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/modules/taxonomy/views_handler_filter_term_node_tid.inc\";s:5:\"%line\";i:303;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/productivity-growth-and-capital-flows-dynamics-reforms', '', '54.36.148.126', 1602555551) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:154:\"Declaration of views_handler_filter_boolean_operator::value_validate() should be compatible with views_handler_filter::value_validate($form, &$form_state)\";s:5:\"%file\";s:126:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/handlers/views_handler_filter_boolean_operator.inc\";s:5:\"%line\";i:149;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/productivity-growth-and-capital-flows-dynamics-reforms', '', '54.36.148.126', 1602555551) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:88:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/views.module\";s:5:\"%line\";i:879;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/productivity-growth-and-capital-flows-dynamics-reforms', '', '54.36.148.126', 1602555551) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:148:\"Declaration of views_handler_filter_node_status::operator_form() should be compatible with views_handler_filter::operator_form(&$form, &$form_state)\";s:5:\"%file\";s:125:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/modules/node/views_handler_filter_node_status.inc\";s:5:\"%line\";i:14;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/productivity-growth-and-capital-flows-dynamics-reforms', '', '54.36.148.126', 1602555551) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:130:\"Declaration of views_plugin_row::options_validate() should be compatible with views_plugin::options_validate(&$form, &$form_state)\";s:5:\"%file\";s:104:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/plugins/views_plugin_row.inc\";s:5:\"%line\";i:135;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/productivity-growth-and-capital-flows-dynamics-reforms', '', '54.36.148.126', 1602555551) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:126:\"Declaration of views_plugin_row::options_submit() should be compatible with views_plugin::options_submit(&$form, &$form_state)\";s:5:\"%file\";s:104:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/plugins/views_plugin_row.inc\";s:5:\"%line\";i:135;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/productivity-growth-and-capital-flows-dynamics-reforms', '', '54.36.148.126', 1602555551) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:88:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/views.module\";s:5:\"%line\";i:879;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/productivity-growth-and-capital-flows-dynamics-reforms', '', '54.36.148.126', 1602555551) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128
Productivity Growth and Capital Flows: The Dynamics of Reforms | CFSP | Consortium on Financial Systems and Poverty

Productivity Growth and Capital Flows: The Dynamics of Reforms

Francisco J. Buera
Yongseok Shin
Publication Type: 
Working Papers
Publication Article File: 
Publication Year: 
2010

Why doesn't capital flow into fast-growing countries?  This paper provides a model incorporating heterogeneous producers and underdeveloped domestic financial markets to study the joint dynamics of total factor productivity (TFP) and capital flows.  When a large-scale reform eliminates idiosyncratic distortions and liberalizes capital flows, the TFP of our model economy rises gradually and capital flows out of it.  The rise in TFP reflects efficient reallocation of capital and entrepreneurial talent, a process drawn out by frictions in domestic financial markets.  The capital outflows reflect a surge in saving - driven not only by initial interest rate differentials but also by strong self-financing motives of entrepreneurs - and a stagnation in investment following the reform, the latter being another ramification of the domestic financial frictions.  Our welfare analysis finds that most individuals in the economy, except for entrepreneurs and the wealthy, are worse off with capital account liberalization. 

Presented at the CFSP & MFI 2009 Finance and Development Conference.

Region: 
Global
Topic: 
International Finance
Topic: 
Economic Modeling
Topic: 
Enterprise
Topic: 
Savings
Topic: 
Growth
Topic: 
Occupational Choice