Capital mobility in historical perspective

The level of international capital mobility has changed considerably over the last century and a half. Using the Feldstein-Horioka savings retention measure, this study examines capital mobility in every decade from 1865 to 1992. The results indicate high capital mobility in the classical gold standard period and much lower mobility during the Bretton Woods era. In recent years capital mobility has increased again. Capital flows are related to capital-output ratios, and there are indications that capital does move to countries where it is most productive. (C) 1998 Society for Policy Modeling. Published by Elsevier Science Inc.