Abstract : The purpose of this paper is to synthesize the thre
e results in the existing literature (and to add a
fourth result) in a
single unified framework and thus to identify the c
onditions under which the capital-exporting and cap
ital-importing
countries gain from international financial integra
tion. We show that the capital-exporting country wi
ns if it saves a
constant fraction of its profits, and that capital-
importing country wins if it saves a constant fract
ion of its wages. In
Solow's model for the integration of the capital ma
rket to be profitable, it is necessary for savings
to be proportional to
income, which increases through the integration of
the capital market: profit of the lender, and wages
of the borrower.
https://hal-unilim.archives-ouvertes.fr/hal-01203591
Contributeur : Thierno Barry
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Soumis le : jeudi 24 septembre 2015 - 17:04:01
Dernière modification le : jeudi 14 mars 2019 - 14:54:04
Archivage à long terme le : mardi 29 décembre 2015 - 09:35:41
Philippe Darreau, François Pigalle. Long-run effects of capital market integration using Solow's model. Economics Bulletin, Economics Bulletin, 2015, 35, pp.1459-1468. ⟨hal-01203591⟩
