Citation

Discussion Paper Details

Please find the details for DP902 in an easy to copy and paste format below:

Full Details

Title: International Capital Mobility in the 1990s

Author(s): Maurice Obstfeld

Publication Date: February 1994

Keyword(s): Capital Controls, Feldstein-Horioka Puzzle, International Capital Mobility and International Portfolio Diversification

Programme Area(s): International Macroeconomics

Abstract: This paper surveys the performance of international capital markets and the literature on measuring international capital mobility. Three main functions of a globally integrated and efficient world capital market provide focal points for the analysis. First, asset-price arbitrage ensures that people in different countries can pool risks to their lifetime consumption profiles. Third, new saving, regardless of its country of origin, is allocated toward the world's most productive investment opportunities. The paper evaluates the international capital market's performance of these three roles by studying data on correlations, international portfolio diversification, and the relations between national saving and domestic investment rates. The conclusion is that while international capital mobility has increased markedly over the last two decades, international capital movements remain less free than intranational movements, even among the industrial countries.

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Bibliographic Reference

Obstfeld, M. 1994. 'International Capital Mobility in the 1990s'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=902