This paper provides a new theory of international capital ows. In a frameworkthat integrates factor-proportions-based trade and nancial capital ows, a novel forceemerges: capital tends to ow towards countries that become more specialized incapital-intensive industries. This `composition' eect...

This paper contributes to the already vast literature on demography-induced internationalcapital flows by examining the role of labor market imperfections and institutions. We setup atwo-country overlapping generations model with search unemployment, which we calibrateon EU15 and US data. Labor...

We document the recent phenomenon of uphill flows of capital from nonindustrial toindustrial countries and analyze whether this pattern of capital flows has hurt growth innonindustrial economies that export capital. Surprisingly, we find that there is a positivecorrelation between current...

In theory, one of the main benefits of financial globalization is that it should allow for moreefficient international risk sharing. In this paper, we provide a comprehensive empiricalevaluation of the patterns of risk sharing among different groups of countries and examinehow international...