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Events of Department of Economics

November 19, 2020 at 12:30 - 13:45

Seminar (Joint with the BAFFI CAREFIN)


Why Does Capital Flow from Equal to Unequal Countries?

Federica Romei (University of Oxford)


Capital flows from equal to unequal countries. We find this to be true in advanced economies, and we find this result to be largely driven by private savings. We introduce a model that can rationalize this fact: more unequal countries endogenously develop deeper financial markets. These markets, in turn, allow households in unequal countries to borrow more, hence the observed direction of capital flows.

by invitation: for information contact