TY  - JOUR
A1  - Engler, Philipp
A1  - Wulff, Alexander
T1  - Opposition to capital market opening
T2  - Applied economics letters
N2  - We employ a neoclassical growth model to assess the impact of financial liberalization in a developing country on capital owners' and workers' consumption and welfare. We find for an average non-OECD country that capital owners suffer a 42% reduction in permanent consumption because capital inflows reduce their return to capital while workers gain 8% of permanent consumption because capital inflows increase wages. These huge gross impacts contrast with the small positive net effect found in a neoclassical representative agent model by Gourinchas and Jeanne (2006). Our findings provide an estimate of the amount of redistribution needed to overcome capitalists' opposition to capital inflows.
KW  - capital flows
KW  - international financial integration
KW  - distributional effects
Y1  - 2014
UR  - https://publishup.uni-potsdam.de/frontdoor/index/index/docId/37933
SN  - 1350-4851
SN  - 1466-4291
VL  - 21
IS  - 6
SP  - 425
EP  - 428
PB  - Routledge, Taylor & Francis Group
CY  - Abingdon
ER  -