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The paper surveys theories of FDI and supporting evidence. A new theory flashes out a unique feature of FDI: hands on … firms. The implications of the theory are that investment is both more efficient (namely, made dependent on the firm …-specific productivity) and, in plausible cases, also larger. The theory can explain both two way flows of FDI among developed economies, and …
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Migration of young workers (as distinct from retirees), even when driven in by the generosity of the welfare state, slows down the trend of increasing dependency ratio. But, even though low-skill migration improves the dependency ratio, it neverthe-less burdens the welfare state. Recent studies...
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