Paper #913
- Title:
- Country portfolios
- Authors:
- Aart Kraay, Norman Loayza, Luis Servén and Jaume Ventura
- Date:
- October 2000
- Abstract:
- Capital flows to developing countries are small and are mostly take the form of loans rather than direct foreign investment. We build a simple model of North-South capital flows that highlights the interplay between diminishing returns, production risk and sovereign risk. This model generates a set of country portfolios and a world distribution of capital stocks that resemble those in the data.
- Keywords:
- Internationall capital flows, country portfolios, sovereign risk
- JEL codes:
- F32, F34
- Area of Research:
- Macroeconomics and International Economics
- Published in:
- Journal of the European Economic Association, 3 (4), 914-945, 2005
Download the paper in PDF format