Reaping the Full Benefits of Financial Openness: Vice Chair Janet L. Yellen At the Bank of Finland 200th Anniversary Conference, Helsinki, Finland, May 6, 2011
“Free capital markets support economic growth by allowing resources to move across borders to their most productive uses. These flows should expand the opportunities for savers and, in the savings-rich countries, likely raise the return on domestic savings. Capital inflows can lower the cost of capital to firms in capital-scarce countries, raising investment. The result is more investment, more productive investment, and faster economic growth than would have occurred in the absence of such capital flows. And these flows do not merely represent the wherewithal to finance investments–they potentially are accompanied by positive spillovers from technological transfer and the adoption of managerial and organizational best practices.”
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