The demand for liquid assets, corporate saving, and international capital flows
Details
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State: Public
Version: Author's accepted manuscript
State: Public
Version: Author's accepted manuscript
Serval ID
serval:BIB_1337EFECE642
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
The demand for liquid assets, corporate saving, and international capital flows
Journal
Journal of the European Economic Association
ISSN
1542-4766
Publication state
Published
Issued date
12/2015
Peer-reviewed
Oui
Volume
13
Number
6
Pages
1101-1135
Language
english
Abstract
The recent period of capital outflows from emerging economies has coincided with an increase in their corporate saving. In this paper, we model corporate saving as a demand for liquid assets by credit-constrained firms in a dynamic open-economy macroeconomic model. We find that the implications of this model are very different from standard models, because the demand for foreign bonds is a complement to domestic investment rather than a substitute. We show that this complementarity is at work when an emerging economy is on its convergence path or when it has a higher TFP growth rate. This framework is consistent with a number of stylized facts found in high-growth, high-investment emerging economies.
Keywords
Capital flows, global imbalances, working capital, credit constraints
Web of science
Open Access
Yes
Create date
06/01/2011 14:23
Last modification date
20/08/2019 12:41