Gourinchas and Jeanne (2006) explain that the gains from capital market integration are small because the natural convergence of economies would have "done the work" of integration if it had not occurred. We provide a simple illustration of this standard theoretical argument using the simplest...

In this didactical exercice we show that the long run welfare gains from international financial integration differ when using the Solow model vis-à-vis the Ramsey model. While the former predicts beneficial effects of financial integration on the wealth and consumption of a poor country...

Barro's model (1990), for purposes of simplification, assumes that producers internalize the learning by doing generated by capital. One consequence is that the price of capital is higher and the price of labor lower than the price of perfect competition which does not internalize the learning...

The purpose of this paper is to synthesize the three results in the existing literature (and to add a fourth result) in a single unified framework and thus to identify the conditions under which the capital-exporting and capital-importing countries gain from international financial integration....