摘要：After liberalizing international transactions of financial assets, many
countries experience large swings in asset prices, capital flows, and aggregate
production. This paper studies how the adjustment to capital account
liberalization depends upon the degree of development of a domestic financial
system, and why the economy with an underdeveloped financial system may be
vulnerable to shocks to the domestic and foreign finance. We construct a model
of a small open economy in which it is difficult to enforce debtors to repay
their debts unless the debts are secured by collateral, and assets usable as
collateral for international borrowing are more restricted than domestic
borrowing
关键词：capital flows, asset prices, domestic and international borrowing constraints
