Intertemporal Resource Allocation in Developing Countries
The Role of Foreign Capital
Bibliographic Data
| ID | 19315365 |
|---|---|
| Authors | Kaj Areskoug (corresponding author) |
| Year | 1976 |
| Volume | 58 |
| Issue | 4 |
| Pages | 478 |
| Publication date | 1976-11-01 |
| Open Access | No |
| Type | ARTICLE |
| Venue | The Review of Economics and Statistics (JOURNAL) |
| Journal identifiers | ISSN: 0034-6535 • E-ISSN: 1530-9142 |
| Publisher | JSTOR (PUBLISHER) |
| DOI | 10.2307/1935880 |
| OpenAlex | W2008525938 |
| Language | EN |
| References cited | 3 |
A great deal of research has been done in recent years on the effects of capital inflows on real investment, saving and output growth in developing countries.' It appears that in many instances these inflows have, in effect, been used for financing an expansion of consumption rather than investment. This note attempts to reinterpret the new research in the broader context of intertemporal resource allocation and intertemporal consumption opportunities. The acceptance of foreign capital, of course, augments the total amount of resources potentially available for current domestic real expenditure (consumption and investment). The invested portion of the foreign capital receipts adds to future potential net domestic product, but part of the domestic product increase may be absorbed by the associated debt service, income remittances and capital repatriations. If the domestic rate of return exceeds the cost of foreign capital, any one of the following three types of capital inflow response is possible: 1) both current and future consumption increases; 2) current consumption increases, while future consumption decreases, or 3) current consumption decreases, while future consumption increases. Crude empirical estimates of the true responses, based on the new research, are now possible
Business · Capital (architecture) · Capital flows · Developing country · Economic growth · Economics · Foreign capital · Foreign direct investment · Geography · International economics · Macroeconomics · Market economy · Microeconomics · Monetary economics · Natural resource economics · Resource (disambiguation) · Resource allocation · Computer Science · Fiscal Policy and Economic Growth · Global Financial Crisis and Policies · Global trade and economics
| Highly cited | No |
|---|