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INTEREST SENSITIVITY OF SHORT‐TERM CAPITAL MOVEMENTS: SOME RECENT STATISTICAL STUDIES
Author(s) -
Carlo G. R. DE
Publication year - 1969
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.1969.tb00929.x
Subject(s) - economics , term (time) , interest rate , capital (architecture) , positive economics , econometrics , macroeconomics , history , physics , archaeology , quantum mechanics
SUMMARY This paper reviews the methods and findings of several studies that have been undertaken recently to estimate the interest sensitivity of short‐term capital movements. The paper concentrates on the studies of P hilip B ell , P eter K enen , and J erome S tein , with references to studies by B enjamin C ohen and R obert G emmill . From the standpoint of balance‐of‐payments policy, the question of the interest elasticity of short‐term capital movements takes on considerable importance. However, the studies conducted thus far do not give a clear‐cut answer to this question. B ell finds that, in general, interest rates have only a minor effect on capital flows, whereas K enen finds them to be highly significant. S tein's work points out drawbacks to the B ell and K enen studies and proposes remedies.