Why Doesn’t Capital Flow from Rich to Poor Countries? (Lucas paradox paper)

Details

Photo

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Name

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Field

International finance / macro

Core idea

Shows that capital doesn’t flood into poor countries the way simple models say it should, and asks why.

Year

1990

How dense

Medium – some theory, some calibration, not insane.

My take

The moment you realize “perfect capital markets” is doing way too much work. Also low-key teaches you how to think about puzzles in macro.