scholarly journals International Capital Mobility and Financial Fragility - Part 4: Which Structural Policies Stabilise Capital Flows When Investors Suddenly Change Their Mind? Evidence from Bilateral Bank Data

2012 ◽  
Author(s):  
Rudiger Ahrend ◽  
Cyrille Schwellnus
Keyword(s):  
Capital Flows ◽  
Capital Mobility ◽  
Financial Fragility ◽  
International Capital ◽  
International Capital Mobility

THE EU–US UNEMPLOYMENT PUZZLE REVISITED: INSTITUTIONS, DEMOGRAPHY, AND CAPITAL FLOWS

2017 ◽  
Vol 83 (3) ◽  
pp. 259-305 ◽  
Author(s):  
Luca Marchiori ◽  
Olivier Pierrard ◽  
Henri R. Sneessens
Keyword(s):  
Labor Market ◽  
Capital Flows ◽  
Capital Mobility ◽  
Population Aging ◽  
Initial Result ◽  
Labor Market Institutions ◽  
International Capital ◽  
Market Institutions ◽  
International Capital Mobility ◽  
The Eu

AbstractThe historical evolution of the EU–US unemployment-rate gap is often explained in the literature in terms of asymmetric changes in labor-market institutions. There may well also be asymmetries in population aging, which may generate international capital flows and have substantial impacts on relative unemployment rates. In this paper, we ask whether the combination of institutions, aging, and capital flows explains the rise in the unemployment gap between 1960 and 2010. To this end, we set up a two-region OLG model with search unemployment in which we introduce the historical and projected changes in labor-market institutions and demographics. We show that asymmetric institutional changes alone can reproduce a large part of the historical rise in the unemployment gap. However, this result no longer holds once we add asymmetric aging in closed economies. We find this initial result again, and in an even stronger form, when we allow for international capital mobility.

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