TY  - JOUR
AU  - Dooley,Michael P.
AU  - Kletzer,Kenneth M.
TI  - Capital Flight, External Debt and Domestic Policies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4793
PY  - 1994
Y2  - July 1994
UR  - http://www.nber.org/papers/w4793
L1  - http://www.nber.org/papers/w4793.pdf
N1  - Author contact info:
Michael P. Dooley
Department of Economics
Engineering II
University of California, Santa Cruz
Santa Cruz, CA 95064
Tel: 831/459 3662
Fax: 831/459-5077
E-Mail: MPD@UCSC.EDU

Kenneth Kletzer
University of California, Santa Cruz
Department of Economics
217 Social Sciences 1
Santa Cruz, CA  95064
Tel: 408-459-3407
E-Mail: kkletzer@cats.ucsc.edu
AB  - It is now well documented that capital flight has been a dominant feature of capital movements between developing and industrial countries.  Since 1988 reductions in the stock of flight capital more than account for private capital flows to emerging markets.  This suggests that what appears to be a diversification of portfolios of residents of developed countries may be a restoration of 'home bias' in the portfolios of residents of developing countries.  We show that changes in the stock of capital flight can increase or decrease welfare depending on the structure of distortionary taxes and subsidies on capital income and the effects of capital flight on the tax base.
ER  -