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INTERNATIONAL FACTOR MOBILITY, PRECAUTIONARY SAVING AND LONG‐RUN ECONOMIC GROWTH *
Author(s) -
ROBERTS MARK A.
Publication year - 2011
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2010.02191.x
Subject(s) - economics , earnings , capital (architecture) , earnings growth , total factor productivity , growth model , productivity , capital accumulation , precautionary savings , monetary economics , macroeconomics , human capital , economic growth , finance , archaeology , history , market liquidity
Long‐run economic growth is analysed in a global model with many small countries prone to national level total factor productivity shocks. International capital mobility raises growth through the effects on precautionary saving of both a fall in interest uncertainty and a rise in earnings uncertainty, while international labour reduces growth, because these same two effects then operate in different directions. Besides this, positive aggregation effects from general global integration imply that international capital mobility unambiguously promotes economic growth, while the growth effects of international labour mobility are less sure because of conflicting mechanisms.