International Capital Mobility in the 1990s

Maurice Obstfeld

No 902, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper surveys the performance of international capital markets and the literature on measuring international capital mobility. Three main functions of a globally integrated and efficient world capital market provide focal points for the analysis. First, asset-price arbitrage ensures that people in different countries can pool risks to their lifetime consumption profiles. Third, new saving, regardless of its country of origin, is allocated toward the world's most productive investment opportunities. The paper evaluates the international capital market's performance of these three roles by studying data on correlations, international portfolio diversification, and the relations between national saving and domestic investment rates. The conclusion is that while international capital mobility has increased markedly over the last two decades, international capital movements remain less free than intranational movements, even among the industrial countries.

Keywords: Capital Controls; Feldstein-Horioka Puzzle; International Capital Mobility; International Portfolio Diversification (search for similar items in EconPapers)
JEL-codes: F21 F32 F36 (search for similar items in EconPapers)
Date: 1994-02
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Citations: View citations in EconPapers (23)

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Related works:
Working Paper: International Capital Mobility in the 1990s (1994)
Working Paper: International capital mobility in the 1990s (1994)
Working Paper: International Capital Mobility in the 1990s (1994)
Working Paper: International Capital Mobility in the 1990s (1993)
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