An analysis of capital mobility from a price and quantity perspective

Hartwich, Tamara. (1998). An analysis of capital mobility from a price and quantity perspective Honours Thesis, School of Economics, The University of Queensland.

       
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Author Hartwich, Tamara.
Thesis Title An analysis of capital mobility from a price and quantity perspective
School, Centre or Institute School of Economics
Institution The University of Queensland
Publication date 1998
Thesis type Honours Thesis
Total pages 112
Language eng
Subjects 14 Economics
Formatted abstract This thesis aims to increase current knowledge regarding existing capital mobility. This is undertaken through two paths. Firstly, a test based on the Extended
Loanable Funds Framework is formed. Previous tests of capital mobility have been based solely on either convergence of yields or the correlation level between savings and investment. This test combines prices and quantities in order to gain a complete picture of capital mobility.

The second path to a greater understanding of capital mobility develops an index which measures the variability in the direction of capital flows. This index is based on an intra-industry trade index developed by Grubel and Lloyd.

Following an in depth discussion of capital mobility, the general conclusion reached from the first test is that the interest differential between Australia and the United States is influenced strongly by borrowing activity. This in turn implies that a default risk or debt premium may be included in the interest differential. The capital flows index indicates that directional variability of capital flows changes over time. Both tests leave room for further analysis and development of capital mobility.

 
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Created: Thu, 02 Dec 2010, 12:32:16 EST by Muhammad Noman Ali on behalf of The University of Queensland Library