Capital Flight, External Debt and Domestic Policies / Michael P. Dooley, Kenneth M. Kletzer.

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Dooley, Michael P

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w4793.Publication details: Cambridge, Mass. National Bureau of Economic Research 1994.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: It is now well documented that capital flight has been a dominant feature of capital movements between developing and industrial countries. Since 1988 reductions in the stock of flight capital more than account for private capital flows to emerging markets. This suggests that what appears to be a diversification of portfolios of residents of developed countries may be a restoration of 'home bias' in the portfolios of residents of developing countries. We show that changes in the stock of capital flight can increase or decrease welfare depending on the structure of distortionary taxes and subsidies on capital income and the effects of capital flight on the tax base.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w4793 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w4790 Agricultural Interest Groups and the North American Free Trade Agreement /	nber w4791 The Ethnic and Racial Character of Self-Employment /	nber w4792 Recent Private Capital Inflows to Developing Countries: Is the Debt Crisis History? /	nber w4793 Capital Flight, External Debt and Domestic Policies /	nber w4794 Work and Crime: An Exploration Using Panel Data /	nber w4795 Is Consumption Growth Consistent with Intertemporal Optimization? Evidence from the Consumer Expenditure Survey /	nber w4796 Why is Capital so Immobile Internationally?: Possible Explanations and Implications for Capital Income Taxation /	Next

July 1994.

It is now well documented that capital flight has been a dominant feature of capital movements between developing and industrial countries. Since 1988 reductions in the stock of flight capital more than account for private capital flows to emerging markets. This suggests that what appears to be a diversification of portfolios of residents of developed countries may be a restoration of 'home bias' in the portfolios of residents of developing countries. We show that changes in the stock of capital flight can increase or decrease welfare depending on the structure of distortionary taxes and subsidies on capital income and the effects of capital flight on the tax base.