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A Tale Of Two “Globalizations”: Capital Flows From Rich To Poor In Two Eras Of Global Finance

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  • Moritz Schularick

    (Free University of Berlin)

Abstract

In this paper we take a comparative look at capital flows to less- developed countries in two eras of financial globalization. The paper extends recent research on the developmental effects of international financial integration, long-term trends in capital mobility and “globalization in historical perspective”. Analyzing the patterns of international financial integration in the three decades of the classical gold standard and after 1990 we show that investment in developing countries was a central element of 19th century financial globalization, but plays only a minor role today. The Lucas paradox of capital failing to flow from rich to poor has grown much stronger. In historical perspective, today’s financial globalization is marked by massive diversification flows between high-income economies and a relative marginalization of less-developed economies.

Suggested Citation

  • Moritz Schularick, 2005. "A Tale Of Two “Globalizations”: Capital Flows From Rich To Poor In Two Eras Of Global Finance," Economic History 0509001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpeh:0509001
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    More about this item

    Keywords

    globalization; capital flows; development finance; capital market integration; economic history;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance

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