Country portfolios and the Solow-model

Volker Reinthaler

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: This paper shows that an open economy Solow model provides a good description of international investment positions in industrialized countries. More than half of the variation of net foreign assets in the 1990's can be attributed to cross country differences in the savings rate, population and productivity growth. Furthermore, these factors seem to be an important channel through which output and wealth affect international investment positions. We interpret this funding as evidence that decreasing returns are an important source of international capital movements. The savings rate (and population growth) influence the composition of country portfolios through their downward (upward) pressure on the marginal productivity of capital.

Keywords: International investments; savings rate; productivity growth (search for similar items in EconPapers)
JEL-codes: F21 F32 F43 (search for similar items in EconPapers)
Date: 2005-09
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://econ-papers.upf.edu/papers/904.pdf Whole Paper (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:904

Access Statistics for this paper

More papers in Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).