Country Portfolios

Servén, Luis, Jaume Ventura, Norman Loayza () and Aart Kraay ()
Authors registered in the RePEc Author Service: Luis Servén

No 2974, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: How do countries hold their financial wealth? We construct a new database of countries' claims on capital located at home and abroad, and international borrowing and lending, covering 68 countries from 1966-97. We find that a small amount of capital flows from rich countries to poor countries. Countries' foreign asset positions are remarkably persistent, and mostly take the form of foreign loans rather than foreign equity. To interpret these facts, we build a simple model of international capital flows that highlights the interplay between diminishing returns, production risk and sovereign risk. We show that in the presence of reasonable diminishing returns and production risk, the probability that international crises occur twice a century is enough to generate a set of country portfolios that are roughly consistent with the data.

Keywords: International capital flows; Sovereigned risk; Country portfolios (search for similar items in EconPapers)
JEL-codes: F32 F34 (search for similar items in EconPapers)
Date: 2001-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://cepr.org/publications/DP2974 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Country Portfolios (2005)
Working Paper: Country Portfolios (2004)
Working Paper: Country portfolios (2001)
Working Paper: Country Portfolios (2000)
Working Paper: Country portfolios (2000)
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:cpr:ceprdp:2974

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP2974

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().