How big are the gains from international financial integration?

• 成果类型: Article
• 署名作者: Hoxha, Indrit; Kalemli-Ozcan, Sebnem; Vollrath, Dietrich
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; University System of Maryland; University of Maryland College Park; Center for Economic & Policy Research (CEPR); National Bureau of Economic Research; University of Houston System; University of Houston
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2013.02.003
• 发表日期: 2013
• 页码: 90-98
• 关键词: productivity; Neoclassical growth model; welfare; FDI; Financial integration

摘要

The literature has shown that the implied welfare gains from financial integration are very small. We revisit these findings and document that welfare gains are substantial if capital goods are not perfect substitutes. We use a model of optimal savings where the elasticity of substitution between capital varieties is less than infinity, but more than the value that would generate endogenous growth. This production structure is consistent with empirical estimates of the actual elasticity of substitution between capital types, as well as with the relatively slow speed of convergence documented in the literature. Calibrating the model, welfare gains from financial integration are equivalent to a 9% increase in consumption for the median country, and 14% for the most capital-scarce. This rises substantially if capital's share in output increases even modestly above 0.3, and remains large if inflows of foreign capital are limited to a fraction of the existing capital stock. (C) 2013 Elsevier B.V. All rights reserved.