Why doesn't capital flow into fast-growing countries? In this paper, we provide a quantitative framework incorporating heterogeneous producers and underdeveloped domestic financial markets to study the joint dynamics of total factor productivity (TFP) and capital flows. When an unexpected...

We analyze the evolution of the plant size distribution, static allocative efficiency, and business dynamism of the Korean manufacturing sector during its growth miracle (1967–2000) and the subsequent slowdown since 2000. The average plant size has an inverse-U pattern over time, uncorrelated...

Why doesn't capital flow into fast-growing countries? In this paper, we provide a quantitative framework incorporating heterogeneous producers and underdeveloped domestic financial markets to study the joint dynamics of total factor productivity (TFP) and capital flows. When an unexpected...

Do developed financial markets lead to economic growth or result from it? While some economists argue for the latter, the author maintains that financial markets—despite their shortcomings of late—are an essential ingredient for an economy to grow in the long run.