In this paper we resolve the long standing Feldstein-Horioka (FH, 1980) puzzle dynamically and explain it statistically. We first study the dynamic properties of capital mobility, and re-estimate the evolution of the FH coefficient using a time-varying-parameter model for each of 67 countries from 1970 to 2009. We find that the trend of the FH coefficient is highly consistent with increased glo...

We develop a tractable two-country overlapping-generations model and show that cross-country differences in financial development can explain three recent empirical patterns of international capital flows: Financial capital flows from relatively poor to relatively rich countries, while foreign direct investment flows in the opposite direction; net capital flows go from poor to rich countries; d...

Regional output per worker has converged across Chinese provinces in 19791989. The estimated rate of convergence is 2.2 percent. This rate of convergence can be explained by neoclassical growth model conditional on assumptions about factor mobility and production elasticities. My empirical results show that capital mobility has been high across Chinese provinces and that the production elastici...

This paper evaluates the quantitative impact of capital liberalization on the taxation structure and welfare of the liberalizing countries when governments conduct fiscal policy optimally but without commitment (time-consistent policies). The transition from a regime of capital autarky to a regime of free mobility leads to a decrease in the long-term tax rate on capital of 13 percent and an inc...

Article history: Received 7 October 2013 Received in revised form 7 March 2014 Accepted 10 March 2014 Available online 17 March 2014 We re-examine two complementary views of international capital mobility using data for 25 OECD countries over the period 1970–2011. Estimation of the original Feldstein–Horioka and Sachs' equations provides mixed evidence of capital mobility, though we do not dete...

This study examines the participation of African Americans on social networking sites (SNS), and evaluates the degree to which African Americans engage in activities in the online environment to mitigate social capital deficits. Prior literature suggests that compared with whites, African Americans have less social capital that can enhance their socio-economic mobility. As such, my research que...

This paper evaluates the quantitative impact of capital liberalization on the taxation structure and welfare of the liberalizing countries when governments conduct fiscal policy optimally but without commitment (time-consistent policies). The transition from a regime of capital autarky to a regime of free mobility leads to a decrease in the long-term tax rate on capital of 13 percent and an inc...

This paper develops an endogenous growth model with spillovers of public goods, Leviathan taxation, and mobile capital to examine the relative merits of centralized and decentralized fiscal systems for economic growth and social welfare. We show that a decentralized system dominates a centralized system in terms of economic growth; however, the difference in social welfare between a decentraliz...