Sovereigns, Upstream Capital Flows, and Global Imbalances

Kalemli-Özcan, Sebnem, Vadym Volosovych and Laura Alfaro
Authors registered in the RePEc Author Service: Sebnem Kalemli-Ozcan

No 8648, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The paper presents new stylized facts on the direction of capital flows. We find (i) international capital flows net of government debt and/or official aid are positively correlated with growth; (ii) sovereign debt flows are negatively correlated with growth only if debt is financed by another sovereign; (iii) public savings are robustly positively correlated with growth as opposed to private savings. Sovereign to sovereign transactions can fully account for upstream capital flows and global imbalances. These empirical facts contradict the conventional wisdom and constitute a challenge for existing theories.

Keywords: Current account; Aid/government debt; Reserves; Puzzles of flows; Productivity (search for similar items in EconPapers)
JEL-codes: F21 F41 O1 (search for similar items in EconPapers)
Date: 2011-11
New Economics Papers: this item is included in nep-opm
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Citations: View citations in EconPapers (49)

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Related works:
Journal Article: SOVEREIGNS, UPSTREAM CAPITAL FLOWS, AND GLOBAL IMBALANCES (2014)
Working Paper: Sovereigns, Upstream Capital Flows, and Global Imbalances (2011)
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