The evidence on international capital immobility is extensive, including the lack of international portfolio diversification, real interest differentials across countries, and the high correlation between domestic savings and investment. The authors develop a model with asymmetric information...

Using an intertemporal equilibrium model, this paper analyzes how lower source-based taxes on capital income impact trade performance and international competitiveness. It shows that, depending on import shares and intertemporal and intratemporal substitution elasticities, capital accumulation...