How to promote capital account liberalization while preventing financial crises is a challenging task for policymakers. This study proposes a nonlinear (progressive) capital flow tax as a solution. We first demonstrat...How to promote capital account liberalization while preventing financial crises is a challenging task for policymakers. This study proposes a nonlinear (progressive) capital flow tax as a solution. We first demonstrate that the collateral requirement of international borrowing can give rise to multiple equilibria and self-fulfilling financial crises. We then show that the crisis equilibrium characterized by large exchange rate depreciation, capital flight and welfare loss can be eliminated by imposing a nonlinear (progressive) tax scheme on capital outflows with the marginal tax rate increasing with the size of individual capital outflows. The implementation of such a tax scheme in China is also discussed.展开更多
This short essay surveys recent literature on the competitive saving motive and its broader economic implications. The competitive saving motive is defined as saving to improve one＇s status relative to other competit...This short essay surveys recent literature on the competitive saving motive and its broader economic implications. The competitive saving motive is defined as saving to improve one＇s status relative to other competitors for dating and marriage partners. Here are some of the key results of the recent literature： （i） cross-country evidence show that greater gender imbalances tend to correspond with higher savings rates; （ii） household-level evidence suggest that： （a） families with unmarried sons in rural regions with more skewed sex ratios tend to have higher savings rates, while savings rates of families with unmarried daughters appear uncorrelated with gender imbalances; and （b） savings rates of families in cities tend to rise with the local sex ratio; （iii） rising sex ratios contribute nearly half of the rise in housing prices in the People＇s Republic of China; and （iv） families with sons in regions of greater sex ratios are more likely to become entrepreneurs and take risky jobs to earn more income.展开更多
International capital flows from rich to poor countries can be regarded as either too small(the Lucas paradox in a one-sector model)or too large(when compared with the logic of factor price equalization in a two-secto...International capital flows from rich to poor countries can be regarded as either too small(the Lucas paradox in a one-sector model)or too large(when compared with the logic of factor price equalization in a two-sector model).To resolve the paradoxes,we introduce a non-neoclassical model which features financial contracts and firm heterogeneity.In our model,free trade in goods does not imply equal returns to capital across countries.In addition,rich patterns of gross capital flows emerge as a function of financial and property rights institutions.A poor country with an inefficient financial system may simultaneously experience an outflow of financial capital but an inflow of FDI,resulting in a small net flow.In comparison,a country with a low capital-to-labor ratio but a high risk of expropriation may experience an outflow of financial capital without a compensating inflow of FDI.展开更多
基金the National Natural Science Foundation of China (No. 71803124)the Shanghai Pujiang Program (No. 17PJC043).
文摘How to promote capital account liberalization while preventing financial crises is a challenging task for policymakers. This study proposes a nonlinear (progressive) capital flow tax as a solution. We first demonstrate that the collateral requirement of international borrowing can give rise to multiple equilibria and self-fulfilling financial crises. We then show that the crisis equilibrium characterized by large exchange rate depreciation, capital flight and welfare loss can be eliminated by imposing a nonlinear (progressive) tax scheme on capital outflows with the marginal tax rate increasing with the size of individual capital outflows. The implementation of such a tax scheme in China is also discussed.
文摘This short essay surveys recent literature on the competitive saving motive and its broader economic implications. The competitive saving motive is defined as saving to improve one＇s status relative to other competitors for dating and marriage partners. Here are some of the key results of the recent literature： （i） cross-country evidence show that greater gender imbalances tend to correspond with higher savings rates; （ii） household-level evidence suggest that： （a） families with unmarried sons in rural regions with more skewed sex ratios tend to have higher savings rates, while savings rates of families with unmarried daughters appear uncorrelated with gender imbalances; and （b） savings rates of families in cities tend to rise with the local sex ratio; （iii） rising sex ratios contribute nearly half of the rise in housing prices in the People＇s Republic of China; and （iv） families with sons in regions of greater sex ratios are more likely to become entrepreneurs and take risky jobs to earn more income.
文摘International capital flows from rich to poor countries can be regarded as either too small(the Lucas paradox in a one-sector model)or too large(when compared with the logic of factor price equalization in a two-sector model).To resolve the paradoxes,we introduce a non-neoclassical model which features financial contracts and firm heterogeneity.In our model,free trade in goods does not imply equal returns to capital across countries.In addition,rich patterns of gross capital flows emerge as a function of financial and property rights institutions.A poor country with an inefficient financial system may simultaneously experience an outflow of financial capital but an inflow of FDI,resulting in a small net flow.In comparison,a country with a low capital-to-labor ratio but a high risk of expropriation may experience an outflow of financial capital without a compensating inflow of FDI.
