Growth, Debt and Economic Transformation: The Capital Flight Problem

  • Guillermo A. Calvo


An outstanding characteristic of the 1990s is the large number of countries (particularly in the ‘East’ and the ‘South’) that are engaged in profound economic transformation processes. These processes entail a considerable amount of construction but, also, a considerable amount of destruction — or ‘creative’ destruction, as Schumpeter used to say (see, for example, Calvo and Coricelli, 1993; Kornai, 1993). Although these countries are prepared to ‘burn their old idols’, they do so in the expectation that they will be rewarded with much better economic performance — that is, more growth and social welfare. The question then arises: are these hopes realistic? Can we identify some key ‘traps’ lying on the road to successful growth?


Current Account Foreign Capital Capital Mobility Capital Inflow Economic Transformation 
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© Palgrave Macmillan, a division of Macmillan Publishers Limited 1998

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  • Guillermo A. Calvo

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