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Imperfect Capital Mobility in an Open Economy Model of Capital Accumulation

This paper introduces a tractable capital market friction mechanism that allows a break of the parity between domestic and external interest rates and generates a gradual evolution of capital stock and other macroeconomic variables-in contrast to the instantaneous convergence found in models with in...

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Bibliographic Details
Main Author: Klyuev, Vladimir
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2004
Series:IMF Working Papers
Subjects:
Capital Accumulation
Wealth
Institutional Investors
Economics
Investment
Stocks
Pension Funds
Finance
Saving
Capital Markets
Financial Instruments
Capital Market
Open Economy Macroeconomics
Unemployment
Aggregate Labor Productivity
General Financial Markets: General (includes Measurement And Data)
Intangible Capital
Aggregate Human Capital
Economic Growth Of Open Economies
Non-bank Financial Institutions
Saving And Investment
Investments: Stocks
Investments: General
Consumption
Macroeconomics
Macroeconomics: Consumption
Wages
Capacity
Investment & Securities
Intergenerational Income Distribution
Capital
Finance: General
Employment
Production And Operations Management
Capital Productivity
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper introduces a tractable capital market friction mechanism that allows a break of the parity between domestic and external interest rates and generates a gradual evolution of capital stock and other macroeconomic variables-in contrast to the instantaneous convergence found in models with interest rate parity. The friction, derived from explicit microfoundations, is such that the cost of new loans is an increasing function of net borrowing
Physical Description:19 pages
ISBN:9781451845051

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