Show simple item record Benigno, Gianluca Fornaro, Luca Wolf, Martin 2021-09-16T10:03:42Z 2021-09-16T10:03:42Z 2021-12
dc.description.abstract Since the late 1990s, the United States has received large capital flows from developing countries - a phenomenon known as the global saving glut - and experienced a productivity growth slowdown. Motivated by these facts, we provide a model connecting international financial integration and global productivity growth. The key feature is that the tradable sector is the engine of growth of the economy. Capital flows from developing countries to the United States boost demand for U.S. non-tradable goods, inducing a reallocation of U.S. economic activity from the tradable sector to the non-tradable one. In turn, lower profits in the tradable sector lead firms to cut back investment in innovation. Since innovation in the United States determines the evolution of the world technological frontier, the result is a drop in global productivity growth. This effect, which we dub the global financial resource curse, can help explain why the global saving glut has been accompanied by subdued investment and growth, in spite of low global interest rates.
dc.format.mimetype application/pdf
dc.language eng
dc.language.iso eng
dc.title The global financial resource curse
dc.type info:eu-repo/semantics/workingPaper
dc.subject.keyword Global saving glut
dc.subject.keyword Global productivity growth
dc.subject.keyword International financial integration
dc.subject.keyword Capital flows
dc.subject.keyword U.S. productivity growth slowdown
dc.subject.keyword Low global interest rates
dc.subject.keyword Bretton Woods II
dc.subject.keyword Export-led growth
dc.rights.accessRights info:eu-repo/semantics/openAccess


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