Date(s) - 12/09/2019
12:00 pm - 1:00 pm
Categories No Categories
The Brown Bag Seminar Series offers current ECON graduate students the opportunity to present ongoing research or to workshop new ideas. The seminars are held on Mondays from 12:00-1:00pm in Clark C307 and are open to everyone.
December 9th’s presenter is ECON Ph.D. graduate student Uthman Baqais. He will be presenting his paper: “International Capital Movements and Global Imbalances: The Role of Complementarities and Trade-offs in Capital Stocks.”
Abstract: Using a unified sustainable growth framework with a broad definition of wealth, I examine international capital flows using a sample of 95 countries during 1995-2015. Such a framework allows for global imbalances as in the case of smoothing the use of exhaustible resource windfalls. The departure from an overall complementary to specific complementarity and tradeoffs provides us with a way of testing for 13 hypotheses regarding cross-border capital flows and global imbalances. These are motivated by synthesizing the literature of international finance and sustainable development under the extended growth framework. For instance, I test for a human capital externality, the global saving glut argument, and the role of institutions and natural resources, among others, in driving capital flows. Moreover, I test for Blecker’s (2005) intriguing argument on comparative advantage in selling financial assets and find supporting evidence. The implication of such findings implies that CA deficit countries with highly developed financial systems have benefited from the current international monetary and financial system through the role of valuation effects. On the other hand, financial liberalization allows subsoil-rich economies to smooth the use of windfalls through foreign reserves accumulation. Other developing countries with CA surpluses due to over savings, rather than low imports, reflect the flaws associated with the current international monetary order.