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...

Capital (physical and human) doesn't flow from rich to poor countries. We show that in order to solve these twin paradoxes, assumption of externality of physical capital is better than assumption of externality of human capital