Financial reforms and capital flows: insights from general equilibrium

How are capital flows affected by financial reforms that relax credit constraints and raise the ability of domestic firms to borrow? At first glimpse one might be tempted to dismiss the question as trivial. If some domestic firms are credit constrained (which we assume to be the case!) relaxing thei...

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Autores principales:	Martin, Alberto, Ventura, Jaume
Formato:	Artículo
Lenguaje:	eng
Publicado:	Banco Central de Chile 2019
Materias:	REFORMA ECONÓMICA MOVIMIENTOS DE CAPITAL
Acceso en línea:	https://hdl.handle.net/20.500.12580/3825
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spelling	oai-20.500.12580-38252021-04-24T11:10:11Z Financial reforms and capital flows: insights from general equilibrium Martin, Alberto Ventura, Jaume REFORMA ECONÓMICA MOVIMIENTOS DE CAPITAL How are capital flows affected by financial reforms that relax credit constraints and raise the ability of domestic firms to borrow? At first glimpse one might be tempted to dismiss the question as trivial. If some domestic firms are credit constrained (which we assume to be the case!) relaxing their constraints will allow them to borrow more and increase their investment. If domestic savings are not affected by this relaxation of credit constraints (which we also assume to be the case!) then this increased investment must be financed with foreign savings. This line of reasoning naturally leads to the conclusion that financial reforms raise capital inflows. Indeed this reasoning has led many to argue that emerging economies should reform their financial systems if they want to absorb more foreign savings and speed up investment and economic growth. 2019-11-01T00:07:01Z 2019-11-01T00:07:01Z 2015 Artículo 978-956-7421-48-0 https://hdl.handle.net/20.500.12580/3825 eng Series on Central Banking Analysis and Economic Policies no. 21 Attribution-NonCommercial-NoDerivs 3.0 Chile http://creativecommons.org/licenses/by-nc-nd/3.0/cl/ .pdf Sección o Parte de un Documento p. 109-137 application/pdf Banco Central de Chile
institution	Banco Central
collection	Banco Central
language	eng
topic	REFORMA ECONÓMICA MOVIMIENTOS DE CAPITAL
spellingShingle	REFORMA ECONÓMICA MOVIMIENTOS DE CAPITAL Martin, Alberto Ventura, Jaume Financial reforms and capital flows: insights from general equilibrium
description	How are capital flows affected by financial reforms that relax credit constraints and raise the ability of domestic firms to borrow? At first glimpse one might be tempted to dismiss the question as trivial. If some domestic firms are credit constrained (which we assume to be the case!) relaxing their constraints will allow them to borrow more and increase their investment. If domestic savings are not affected by this relaxation of credit constraints (which we also assume to be the case!) then this increased investment must be financed with foreign savings. This line of reasoning naturally leads to the conclusion that financial reforms raise capital inflows. Indeed this reasoning has led many to argue that emerging economies should reform their financial systems if they want to absorb more foreign savings and speed up investment and economic growth.
format	Artículo
author	Martin, Alberto Ventura, Jaume
author_facet	Martin, Alberto Ventura, Jaume
author_sort	Martin, Alberto
title	Financial reforms and capital flows: insights from general equilibrium
title_short	Financial reforms and capital flows: insights from general equilibrium
title_full	Financial reforms and capital flows: insights from general equilibrium
title_fullStr	Financial reforms and capital flows: insights from general equilibrium
title_full_unstemmed	Financial reforms and capital flows: insights from general equilibrium
title_sort	financial reforms and capital flows: insights from general equilibrium
publisher	Banco Central de Chile
publishDate	2019
url	https://hdl.handle.net/20.500.12580/3825
work_keys_str_mv	AT martinalberto financialreformsandcapitalflowsinsightsfromgeneralequilibrium AT venturajaume financialreformsandcapitalflowsinsightsfromgeneralequilibrium
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Financial reforms and capital flows: insights from general equilibrium

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