The Lucas Paradox: Review of Marginal Product of Capital and Net Versus Gross Capital Flows

2019 ◽  
pp. 25-49
Author(s):  
Muhammad Akhtaruzzaman
Keyword(s):  
Capital Flows ◽  
Marginal Product ◽  
Marginal Product Of Capital ◽  
Gross Capital Flows

scholarly journals INTRA ASEAN-5 CAPITAL FLOWS: DO THEY REPRESENT NEOCLASSICAL BELIEF OR LUCAS PARADOX?

2015 ◽  
Vol 18 (2) ◽  
pp. 157-182
Author(s):  
Nurul Qolbi ◽  
Akhmad Syakir Kurnia
Keyword(s):  
Human Capital ◽  
Capital Flows ◽  
Capital Flow ◽  
Marginal Product ◽  
Host Countries ◽  
Poor Countries ◽  
Quality Of Institutions ◽  
Marginal Product Of Capital ◽  
Asean Countries

In the neoclassical belief, capital flows downhill from rich to poor countries as a consequence of capital endowment variation. In contrast to the neoclassical belief, Lucas found evidence that capital tends to flow uphill. This paper investigates the intra ASEAN-5 capital flows. Using panel estimation, we found that marginal product of capital, human capital, total factor productivity growth, and the quality of institutions appear as determinants for the capital flow from Indonesia, Malaysia, Philippines, and Thailand to Singapore as a host country. On the contrary, the capital flow from Singapore to other ASEAN countries as host countries is encouraged only by the quality of institutions, human capital as well as per capita GDP. The result shows that Lucas variables emerge as determinants for the uphill and downhill capital flow in ASEAN-5. In the meantime, marginal product of capital that represents neoclassical variable appears as the determinant for uphill capital flow from other ASEAN countries to Singapore. This gives significant insight that Lucas variables emerge as companion to the neoclassical variables in explaining intra ASEAN capital flow

The Marginal Product of Capital, Capital Flows, and Convergence

2010 ◽  
Vol 100 (2) ◽  
pp. 73-77 ◽  
Author(s):  
Sirsha Chatterjee ◽  
Kanda Naknoi
Keyword(s):  
Capital Flows ◽  
Marginal Product ◽  
Marginal Product Of Capital

scholarly journals Banking Crises, External Crises and Gross Capital Flows

2016 ◽  
Vol 2016 (273) ◽  
Author(s):  
Thorsten Janus ◽  
◽  
Daniel Riera-Crichton ◽  
Keyword(s):  
Capital Flows ◽  
Banking Crises ◽  
Gross Capital Flows

scholarly journals Gross Capital Flows: Dynamics and Crises

2011 ◽  
Author(s):  
Fernando Broner ◽  
Tatiana Didier ◽  
Aitor Erce ◽  
Sergio L. Schmukler
Keyword(s):  
Capital Flows ◽  
Gross Capital Flows

Dynamics of capital controls: panel evidence from Asia

2020 ◽  
Vol 47 (2) ◽  
pp. 242-263
Author(s):  
Biplab Kumar Guru ◽  
Inder Sekhar Yadav
Keyword(s):  
Capital Flows ◽  
Capital Controls ◽  
Substitution Effect ◽  
Capital Flight ◽  
Empirical Examination ◽  
Content Type ◽  
Asian Economies ◽  
Asset Classes ◽  
The Impact ◽  
Gross Capital Flows

PurposeThis study empirically examines the effect of capital controls on the volume and composition of capital flows at aggregated as well as at disaggregated level by different asset classes such as debt, FDI, equity, and derivatives.Design/methodology/approachSeveral dynamic panel SYS-GMM models are employed on two sets of unique data on cross-border capital flows and capital control index along with control variables at aggregated and disaggregated level by different asset classes during 1995–2015 for a sample of 31 Asian economies.FindingsEconometric findings suggest that higher capital controls effectively reduce gross capital flows. The reduction in gross capital flows is largely found to be on account of effectiveness of controls on equity flows. However, the impact of controls on overall debt and derivative flows is found to be insignificant. Further, it was found that an increase in direct capital controls disaggregated by inflow and outflow categories significantly reduced the inflow of debt and equity + FDI flows and outflow of equity + FDI and derivative flows. Finally, the study did not find any substitution effect (due to indirect controls) and net effect on capital flows.Practical implicationsResults of such empirical examination may enable governments in respective countries to pursue prudent and rational capital controls as a shield against capital flight and shock transmission.Social implicationsPreventing capital flight through effective controls has macroeconomic benefits such as maintaining stability in income, growth, interest rate, exchange rate, and employment levels for the society.Originality/valueThe primary contribution of the study is the analysis of effectiveness of capital controls disaggregated by different asset categories such as debt, equity, FDI, and derivatives using two unique recent data sets for a large sample of Asian economies.

scholarly journals Gross Capital Flows: Dynamics and Crises

2011 ◽  
Author(s):  
Fernando A. Broner ◽  
Tatiana Didier ◽  
Aitor Erce ◽  
Sergio L. Schmukler
Keyword(s):  
Capital Flows ◽  
Gross Capital Flows

International reserves and gross capital flows dynamics

2016 ◽  
Vol 60 ◽  
pp. 151-171 ◽  
Author(s):  
Enrique Alberola ◽  
Aitor Erce ◽  
José Maria Serena
Keyword(s):  
Capital Flows ◽  
International Reserves ◽  
Gross Capital Flows
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