000294134 001__ 294134 000294134 005__ 20250213113308.0 000294134 0247_ $$2doi$$a10.71609/iheid-bt28-y284 000294134 037__ $$aBOOK 000294134 245__ $$aCan countries rely on foreign saving for investment and economic development? 000294134 260__ $$aGeneva 000294134 260__ $$bThe Graduate Institute 000294134 260__ $$c2016 000294134 269__ $$a2016 000294134 300__ $$a53 p. 000294134 336__ $$aPapers and Reports 000294134 490__ $$aGraduate Institute of International and Development Studies Working Paper ; no. 07/2016 000294134 520__ $$aA surprisingly large number of countries have been able to finance a significant fraction of domestic investment using foreign finance for extended periods. While many of these episodes are in low-income countries where official finance is more important than private finance, we also identify a number of episodes where a substantial fraction of domestic investment was financed via private capital inflows. That said, we find that foreign savings are not a good substitute for domestic savings. More often than not, episodes of large and persistent current account deficits do not end happily. Rather, they end abruptly with compression of the current account, real exchange rate depreciation, and a sharp slowdown in investment. We conclude that financing growth and investment out of foreign savings, while not impossible, is risky. 000294134 700__ $$aCavallo, Eduardo 000294134 700__ $$aEichengreen, Barry J. 000294134 700__ $$aPanizza, Ugo 000294134 8564_ $$93147dd37-cbcb-4dd2-8901-99efa0e375b1$$s570677$$uhttps://repository.graduateinstitute.ch/record/294134/files/HEIDWP07-2016_CFD.pdf 000294134 8564_ $$936eda72d-03b8-444c-99a0-d7e8ab2730d0$$xpdfa$$s2049655$$uhttps://repository.graduateinstitute.ch/record/294134/files/HEIDWP07-2016_CFD.pdf?subformat=pdfa 000294134 901__ $$uInternational Economics Department$$0319285 000294134 901__ $$uCentre for Finance and Development 000294134 909CO $$ooai:repository.graduateinstitute.ch:294134$$pIHEID:Infonet$$pGLOBAL_SET$$pIHEID:Infonet_CFD$$pIHEID:Infonet_IE_2$$pIHEID:Infonet_CTEI$$pIHEID:Infonet_CCDP$$pIHEID:Explore$$pIHEID:Infonet_IE 000294134 937__ $$aWP-2016-054 000294134 980__ $$aINFONET 000294134 980__ $$aWP