AcAdemic archive
Dr. Keyu Jin is an associate professor of Economics at the London school of Economics. She is from Beijing, China, and holds a B.A., M.A. and Phd from Harvard University.
Her research is on international economics - such as why capital flows from poor to rich countries, how the global implications of U.S. monetary and fiscal policies have changed; as well as on how the rise of China impacts the global economy, from several perspectives - trade, capital flows, global interest rates and saving, demographics, productivity and technology.
Dr. Keyu’s book, The New China Playbook, is available now.
Industrial Structure and Capital Flows
This paper provides a new theory of international capital flows. In a framework that integrates factor-proportions-based trade and financial capital flows, a novel force emerges: capital tends to flow toward countries that become more specialized in capital-intensive industries. This "composition" effect competes with the standard force that channels capital toward the location where it is scarcer. If the composition effect dominates, capital flows away from the country hit by a positive labor force/productivity shock—a flow "reversal." Extended to a quantitative framework, the model generates sizable current account imbalances between developing and developed countries broadly consistent with the data. (JEL F14, F21, F32, F41, L16, O19)
Keyu Jin
American Economic Review 2012, 102(5): 2111-2146.
Abstract
This paper provides a new theory of international capital flows. In a framework that integrates factor-proportions-based trade and financial capital flows, a novel force emerges: capital tends to flow toward countries that become more specialized in capital-intensive industries. This “composition” effect competes with the standard force that channels capital toward the location where it is scarcer. If the composition effect dominates, capital flows away from the country hit by a positive labor force/productivity shock—a flow “reversal.’’ Extended to a quantitative framework, the model generates sizable current account imbalances between developing and developed countries broadly consistent with the data. (JEL F14, F21, F32, F41, L16, O19)