CNSE Workshop

Global Financial Imbalances and Endogenous Growth in a North-South Setting

Time：Friday OCT. 28th; 15:30-17:00
Venue：the Small Classroom, Wanzhong Building, NSD(Longrun Garden), PKU
Host：Prof. Jiajun XU; Prof. Xin WANG; Prof. Yong WANG
Speaker：Basant K Kapur (National University of Singapore)

【ABSTRACT】
This paper seeks to integrate two areas of current interest – the study of Global Financial Imbalances (GFI) between North and South, and endogenous product and process innovation in N and S.  N entrepreneurs develop new products, and contract with S firms to produce those products once developed.  The N developer knows ex ante the infinite trajectory of optimal process innovation that the S firm can undertake, partly on the basis of which the former will decide whether or not to develop and market the new product.  We consider two regimes, a Financial Autarchy (FA) and a Financial Integration (FI) regime.  Trade flows are unrestricted in both regimes, but financial (debt) flows only occur under FI: we generate these flows by assuming, in line with findings of Hofstede and Hofstede (2005), that S consumers have a lower rate of time preference than N consumers.  We show under our parameter calibration that moving from FA to FI induces significant endogenous dynamic responses of product and process innovation, which significantly affect the macroeconomic and welfare consequences of FI.  Thus, abstracting from innovation, as calibrated models of GFI typically do, can result in considerable mis-estimation of the macroeconomic, growth, and welfare consequences of FI.

【SPEAKER】

Basant Kapur obtained his PhD from Stanford University in 1974, and is currently Professor of Economics at the National University of Singapore.  Over the course of his career, he has worked in various areas of Economics – financial repression and liberalization in less developed economies, open-economy macroeconomics, the Singapore Economy, values and economics, housing price dynamics, growth and well-being, and endogenous growth and structural change, in closed and open economies.  He has published in the Journal of Political Economy, Quarterly Journal of Economics, International Economic Review, Economic Journal,  Journal of Development Economics, Economics and Philosophy, Social Choice and Welfare, Economic Theory, Journal of Economic Dynamics and Control, Journal of Economics, and other journals.

Registration：http://www.huodongshu.com/event/10038565/?is_easy=2