02128cas a2200325 a 4500 AALejournalIMF023096 230101c9999 xx r poo 0 0eng d 20.00 USD 9798400210372 1018-5941 BD-DhAAL BD-DhAAL Harms, Philipp. Inequality and the Structure of Countries' External Liabilities / Philipp Harms, Mathias Hoffmann, Miriam Kohl, Tobias Krahnke. Washington, D.C. : International Monetary Fund, 2022. 1 online resource (32 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students In this paper, we present empirical evidence that higher income inequality is associated with a greater equity share in countries' external liabilities, and we develop a theoretical model that can explain this observation: In a small open economy with traded and nontraded goods, entry barriers depress entrepreneurial activity in nontraded industries and raise income inequality. The small number of domestic nontraded-goods firms leaves room for foreign firms to operate on the domestic market, and it reduces external borrowing. The model suggests that barriers to entrepreneurial activity could be conducive to attract equity-type capital inows. Our empirical results lend some support to this conjecture. Mode of access: Internet International Investment imf International Lending and Debt Problems imf Long-Term Capital Movements imf Personal Income, Wealth, and Their Distributions imf Hoffmann, Mathias. Kohl, Miriam. Krahnke, Tobias. IMF Working Papers; Working Paper ; No. 2022/138 Full text available on IMF https://elibrary.imf.org/openurl?genre=journal&issn=1018-5941&volume=2022&issue=138 IMF e-Library