Capital Mobility: The Impact on Consumption, Investment and Growth

The industrialized world has recently witnessed a dramatic increase in the volume of international capital movements in the forms of borrowing and lending, bond transactions and foreign direct investment. At the same time, many non-OECD countries have embarked on extensive programmes of capital market liberalization. This volume, drawn from the proceedings of a CEPR conference with the Bank of Israel and the Pinhas Sapir Center for Development, Tel Aviv University, examines the implications of this increased international capital mobility for both industrialized and developing countries. The contributions look at the effect of recent developments on economic fluctuations, and on fiscal and monetary policies under alternative exchange rate regimes. They also address the erosion of capital taxation as a source of government revenue, the contribution of mobile capital to development with 'endogenous growth', the role of mobile capital in reducing unemployment where there are large-scale population flows, and the convergence of national growth rates.