The Implications of Knowledge-Based Growth for the Optimality of Open Capital Markets

Meir Kohn and Nancy Marion ()

No 2487, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper reexamines the view that opening capital markets must have long-run benefits. The analysis shows that the desirability of opening a country's capital markets depends on the nature of the technology assumed. Models of knowledge-based growth predict that changes which alter the economy's level of production will also affect the economy's growth rate and hence the welfare of future generations. Standard neoclassical growth models imply no such effects on growth or welfare. If production does involve an important element of learning by doing, inference from the standard models may be seriously misleading. In particular, opening capital markets does not necessarily improve welfare for the nation or for the world as a whole.

Date: 1988-01
Note: ITI IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published as Canadian Journal of Economics, November 1992

Downloads: (external link)
http://www.nber.org/papers/w2487.pdf (application/pdf)

Related works:
Journal Article: The Implications of Knowledge-Based Growth for the Optimality of Open Capital Markets (1992)
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:nbr:nberwo:2487

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w2487

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().