Working Paper: NBER ID: w1692
Authors: Maurice Obstfeld
Abstract: This paper is a critical assessment of some recent empirical evidence on the extent of international capital mobility. Its major conclusion is that while much of this evidence is difficult to interpret without ambiguity, it is consistent with a world economy in which the degree of capital mobility is high and increasing. Two main approaches to the measurement of capital mobility are discussed. The first, traditional, approach is based on comparing expected yields on assets located in different countries. The second,and more novel, approach is based on comparing national saving rates and domestic investment rates.
Keywords: capital mobility; international finance; saving-investment correlation
JEL Codes: F21; F32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Domestic saving (D14) | Domestic investment (E22) |
| High capital mobility (F20) | Strong cross-border linkages (F55) |
| Domestic saving policies (D14) | Domestic investment rates (F21) |
| Innovations in saving (O35) | Innovations in investment (O35) |