Hussein, K.A. and de Mello, L.R. (1999) International capital mobility in developing countries; theory and evidence. Journal of International Money and Finance, 18 (3). pp. 367-381. ISSN 0261-5606.
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Despite the importance of international capital mobility in influencing the outcome of stabilization policies, there is little research on the issue in developing countries. This paper tests the degree of capital mobility in nine developing countries, using the intertemporal consumption-smoothing framework. We find considerable evidence to suggest that capital is sufficiently mobile in the countries under examination to facilitate consumption smoothing in the event of shocks to the national cash flow (national income net of private investment and government spending). Our findings also suggest that the impact of shocks to one or more components of the national cash flow on the current account is offset by dynamic responses of other components, such that the current account balance is preserved from drastic movements over time.
|Uncontrolled keywords:||capital mobility; consumption smoothing; developing countries|
|Subjects:||H Social Sciences > HB Economic Theory|
|Divisions:||Faculties > Social Sciences > Kent Business School|
|Depositing User:||I.T. Ekpo|
|Date Deposited:||21 Jun 2009 16:37|
|Last Modified:||21 Jun 2009 16:37|
|Resource URI:||http://kar.kent.ac.uk/id/eprint/16856 (The current URI for this page, for reference purposes)|
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