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1 janvier 2009
- handle: 10670/1.t4pgtb
info:eu-repo/semantics/openAccess
Mots-clés
trade flows capital flows financial frictionsSujets proches
Capital outflow Capital flows Movements of capital Capital inflow Flight of capital Flow of capital Capital flightCiter ce document
Spiros Bougheas et al., « The impact of financial market imperfections on trade and capital flows », EconoQuantum, ID : 10670/1.t4pgtb
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Résumé
We introduce financial frictions in a two sector model of international trade with heterogeneous agents. The level of specialization in the economy (economic development) depends on the quality of financial institutions. Underdeveloped financial markets prohibit an economy to specialize in sectors where finance is important. Capital flows and international trade are complements when countries differ in the degree of development of their financial sectors. Capital flows to countries with more robust financial institutions which in turn allow their economies to develop sectors that are financially dependent.