Vox:
International capital flows, sectoral resource allocation, and the financial resource curse
11 October 2015
In the aftermath of the Global Crisis, policymakers have adopted policies to limit, or at least manage, capital inflows. This column explores episodes of capital inflows coupled with weak productivity growth, in other words, the financial resource curse. The findings show that once access to foreign capital subsides, the initial boom gives way to a recession. Both investment and employment in the manufacturing sector drop, and the larger the decrease of labour in manufacturing, the sharper the following contraction.
This article was published online by Vox on October 11, 2015
Link to article here
Related publications
'Large Capital Inflows, Sectoral Allocation and Economic Performance', Gianluca Benigno, Nathan Converse and Luca Fornaro, Centre for Economic Performance Discussion Paper No. 1348, May 2015
Related Links
Gianluca Beningo webpage
Trade Programme webpage