Intro to Lucas's Why Doesn't Capital Flow from Rich to Poor Countries? - Macat Economics Video

Macat Analysis
Macat, 2016
Level: beginner
Perspective: Neoclassical Economics
Topic: finance, north-south relations
Format: Short Film
Duration: 00:03:23

Robert Lucas' answer to the question why capital investment on a global scale does not follow the predictions of neoclassical theory and will be employed where marginal returns are higher (i.e. in places where capital is scarce) is explained. The suggested reasons include risk and uncertainty in financial markets, as well as differences in governance structures and institutions.


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