Institutional Affiliation: Federal Reserve Bank of St. Louis
Information about this author at RePEc
NBER Working Papers and Publications
|November 2015||Bad Investments and Missed Opportunities? Postwar Capital Flows to Asia and Latin America|
with Lee E. Ohanian, Mark L. J. Wright: w21744
Since 1950, the economies of East Asia grew rapidly but received little inter-national capital, while Latin America received considerable international capitaleven as their economies stagnated. The literature typically explains the failureof capital to flow to high growth regions as resulting from international capitalmarket imperfections. This paper proposes a broader thesis that country-specificdistortions, such as domestic labor and capital market distortions, also impactcapital flows. We develop a DSGE model of Asia, Latin America, and the Rest ofthe World that features an open-economy business cycle accounting framework tomeasure these domestic and international distortions, and to quantify their con-tributions to international capital flows. We find that domestic distortions havebeen...
Published: Lee E. Ohanian & Paulina Restrepo-Echavarria & Mark L. J. Wright, 2018. "Bad Investments and Missed Opportunities? Postwar Capital Flows to Asia and Latin America," American Economic Review, vol 108(12), pages 3541-3582. citation courtesy of