An Analysis of Reverse Capital Flow among Rich and Poor Countries (A Critical Review of R.E.Lucas's Paper)

Dallali Isfahani, Rahim; Delangizan, Sohrab

An Analysis of Reverse Capital Flow among Rich and Poor Countries (A Critical Review of R.E.Lucas's Paper)

Authors

Abstract

This study is a critical review of locus's paper (١٩٩٠) on international
capital mobility. The key question that he addresses is:" Why does
capital not flow from rich to poor countries?" The author deals with
the subject by critically reviewing Lucas's work, and his choice of
model and analytical objective, and tries to investigate crudely the
necessary issues which were either neglected or did not receive due
attention, such as: reverse human capital, inconsistent rules and
regulations, and high investment risks in poor countries.
Finally, in addition to the concluded remarks, primary suggestions
are made with respect to reduction of political risk, development and
application of proper rules to prevent money laundering and financial
corruption…

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