Capital flight, saving rate and the golden rule level of capital: policy recommendations for Latin America countries

Joaquin, Vespignani L (2008): Capital flight, saving rate and the golden rule level of capital: policy recommendations for Latin America countries. Published in: American Review of Political Economy , Vol. 6, No. 2 (December 2008): pp. 1-15.

Abstract

This paper seeks to analyse the determinants of capital flight in selected Latin American countries throughout the 1990s, and gives some insights into what economic policies would be adequate under capital flight conditions. Finding, empirically, the saving rate to be a new determinant of capital flight, this paper discusses whether or not achieving the golden rule level of capital would be desirable and what source of government revenue (direct or indirect taxation) would be appropriate under those conditions.

• Item Type: MPRA Paper
• Language: English
• Keywords: Capital Flight, Determinant, Golden Rule, Direct Taxation, Indirect Taxation
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies

References

Abdullah Almounsor, Edsel Beja Jr, Pokpong Juvith and Jared Ragusett (2003), “Capital flight from Thailand, 1980-2000”; Some findings.

Boyrie Maria E, Pak Simon, J and Zdanowcz John S (2005) “Estimating the Magnitude of Capital Flight Due to Abnormal Pricing in International Trade: The Russia-USA Case”, Accounting Forum Journal, 29,2005, pp.249-270.

Chang Kevin, Claessess Stijin and Cumby Robert, (1997) International Journal of Financial Economics, vol. 2, pp101-119.

Chipalkatti Niranjan and Rishi Meenaskshi (2001) “External debt and capital flight in the Indian Economy”, Oxford Development Studies, vol. 29, no 1.

Cuddington, John T (1986) “Capital Flight; estimates, issues and explanations” Princeton Studies in International Finance, No.58, Princeton, Princeton University.

Dooley Michel (1988) “Capital flight: A response to Differences in Financial Risk”, IMF Staff Papers.

Dooley Michel, William Helkie, Ralph Tryon and John Underwood (1986), “An Analysis of External Debt Positions of Eight Developing Countries Through 1990”, Journal of Development Economics” , Vol.21 pp.283-318.

Eggerstedt, Harald and Brideau Hall, Rebecca (1995), World Development, vol. 23 no 2, pp 211-232, Elsevier Science Ltd, printed in Great Britain.

Erbe, Suzanne (1985).“The flight of Capital from Developing Countries,” Intereconomics, November/December, pp. 268-275.

Hermes, Neils, Lensink, Robert and Murinde, Victor. (2003), "Capital Flight: The Key Issues", in A.W. Mullineux and V. Murinde (ed.), The Handbook of International Banking, Cheltenham: Edward Elgar, pp 516-543.

Jones, Charles, I. (2002), “Economic Growth” second edition, Norton & Company, Inc, New York, USA, several chapters.

Ketkar, Suhas L. and Kusum W.Ketkar (1989) “Determinant of Capital Flight from Argentina, Brazil and Mexico” Contemporary Policy Issues, 7 pp 11-29.

Mankiw, N.G, (1997) “Macroeconomics”, third Edition, New York, ESA, Ch 4.

Mayorga, Mauricio M. and Munoz, Evelyn S. (2000) “La Tecnica de Datos de Panel, una guia Para su uso e interpretación”, Banco Central de Costa Rica, departamento de Investigación economica.

Mikkelsen, Jan G, (1991) “An econometric investigation of capital flight” Department of Econometrics, University of Aarhus, Aarhus, Denmark.

Myrvin Antony, L. and Hugues Hallett, Andrew J. (1992), “How successfully do we measure Capital Flight ? The Empirical Evidence from Five Developing Countries”, The Journal of Development Studies, vol.28 pp 538-556, Published by Frank Cass, London, UK.

Romer, David (2001) “Advanced Macroeconomics” second edition, McGraw-Hill Higher Education, Ch1.

Onwioduokit E. A., “Capital flight from Nigeria: an Empirical Re-examination”, West African Monetary Institute, Accra, Ghana.

Pastor, jr. Manuel (1990), “Capital Flight from Latin America”, World Development, vol18, pp1-18.

Schneider, Benu (2003), “Measuring Capital Flight: Estimates and Interpretations”, Overseas Development Institute, London, UK.

World Bank, 1985 “Case Study:Mexico” in D. Lessard and J. Willson (eds) “Capital Flight and the Third World debt”, Institute of International Economics, Washington D.C.