000296079 001__ 296079
000296079 005__ 20250213113301.0
000296079 0247_ $$2doi$$a10.1007/s10290-017-0301-5
000296079 037__ $$aARTICLE
000296079 245__ $$aCan countries rely on foreign saving for investment and economic development ?
000296079 269__ $$a2018
000296079 336__ $$aJournal Articles
000296079 520__ $$aContrary to widespread presumption, a surprisingly large number of countries have been able to finance a significant fraction of their investment for extended periods using foreign finance. While many of these episodes are in countries where official finance is important, we also identify episodes where a substantial fraction of domestic investment is financed by private capital inflows. Although there is evidence of a positive growth effect of such inflows in the short run, that positive impact dissipates after 5 years and turns negative over longer horizons. Many such episodes end abruptly, with compression of the current account and sharp slowdowns in investment and growth. Summing over the inflow (current account deficit) episode and its aftermath, we find that growth is slower than when countries rely on domestic savings. The implication is that financing growth and investment out of foreign savings, while not impossible, is risky and too often counterproductive.
000296079 580__ $$aIn: Review of World Economics. - Volume 154(2018), Issue 2, pages 277–306
000296079 700__ $$aCavallo, Eduardo
000296079 700__ $$aEichengreen, Barry J.
000296079 700__ $$aPanizza, Ugo
000296079 8564_ $$9936299e6-7f07-473d-a7b8-67156aa30799$$s1313795$$uhttps://repository.graduateinstitute.ch/record/296079/files/s10290-017-0301-5.pdf
000296079 901__ $$uInternational Economics Department$$0319285
000296079 901__ $$uCentre for Finance and Development
000296079 909CO $$ooai:repository.graduateinstitute.ch:296079$$pGLOBAL_SET$$pIHEID:Explore