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Bad Investments and Missed Opportunities? Postwar Capital Flows to Asia and Latin America

Ohanian, Lee E. ; Restrepo-Echavarria, Paulina ; Wright, Mark L. J.

The American economic review, 2018-12, Vol.108 (12), p.3541-3582 [Periódico revisado por pares]

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Título:
Bad Investments and Missed Opportunities? Postwar Capital Flows to Asia and Latin America
Autor: Ohanian, Lee E. ; Restrepo-Echavarria, Paulina ; Wright, Mark L. J.
Assuntos: Capital movement ; Economic models ; Foreign investment ; Incentives ; Labor market ; Labor supply ; World War II
É parte de: The American economic review, 2018-12, Vol.108 (12), p.3541-3582
Descrição: After World War II, international capital flowed into slow-growing Latin America rather than fast-growing Asia. This is surprising as, everything else equal, fast growth should imply high capital returns. This paper develops a capital flow accounting framework to quantify the role of different factor market distortions in producing these patterns. Surprisingly, we find that distortions in labor markets, rather than domestic or international capital markets, account for the bulk of these flows. Labor market distortions that indirectly depress investment incentives by lowering equilibrium labor supply explain two-thirds of observed flows, while improvement in these distortions over time accounts for much of Asia’s rapid growth.
Editor: Nashville: American Economic Association
Idioma: Inglês

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