Matt Lowe, Chris Papageorgiou, Fidel Pérez Sebastián, 20 February 2019

Capital doesn’t flow to developing countries as much as economic theory suggests it should, and this might imply that capital is misallocated across nations. This column argues that once public capital is removed from the equation, the evidence shows that private capital is allocated remarkably efficiently across nations. It also suggests that the inefficiencies related to the allocation of public capital across countries can be significant and much larger than those related to private capital. 

Daniel Gros, 26 August 2013

Why does capital flow from poor to rich countries? This column argues that the direction of capital flows makes economic sense given savings behaviour. But the real puzzle is why savings rates are high in poor countries and low in rich ones.

Uri Dadush, Bennett Stancil, 05 July 2011

Economists and policymakers alike tend to assume that capital should flow from rich to poor countries, but in recent years the opposite has happened. This column explains why and warns that developing countries should not assume they can or should run large current deficits simply because they are poor.

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