Chapter 17

International Trade and International Capital Flows

K. Jin

London School of Economics, London, UK

Outline

Various recent works have sought to understand how endogenous trade dynamics impact international capital flows. In integrating structures of trade into macroeconomic frameworks, one can show that capital can flow from labor-intensive, poor countries to capital-intensive, rich countries upon financial and trade liberalization (Jin, K., in press. Industrial structure and capital flows. American Economic Review). Trade and capital flows can become complements rather than substitutes ...

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