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Philippe Darreau and Francois Pigalle
''Converge or integrate? A note on Gourinchas and Jeanne : The elusive gains from international financial integration''
( 2016, Vol. 36 No.2 )
Gourinchas and Jeanne (2006) explain that the gains from capital market integration are small because the natural convergence of economies would have "done the work" of integration if it had not occurred. We provide a simple illustration of this standard theoretical argument using the simplest Solow model in a small open economy.
Keywords: Capital flows, international financial integration, growth, Solow model.
JEL: E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
F2 - International Factor Movements and International Business: General
Manuscript Received : Mar 08 2016 Manuscript Accepted : Apr 29 2016

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