Capital Mobility in the World Economy: Theory and Measurement
66 Pages Posted: 27 Apr 2000 Last revised: 18 Aug 2010
Date Written: August 1985
This paper is a critical assessment of some recent empirical evidence on the extent of international capital mobility. Its major conclusion is that while much of this evidence is difficult to interpret without ambiguity, it is consistent with a world economy in which the degree of capital mobility is high and increasing. Two main approaches to the measurement of capital mobility are discussed. The first, traditional, approach is based on comparing expected yields on assets located in different countries. The second,and more novel, approach is based on comparing national saving rates and domestic investment rates.
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