INVESTING AT HOME OR SAVING: A NOTE ON CHILE'S FINANCIAL FLOWS.

In this paper, we analyze the financial flow of funds between Chile and its trade and investment partners using balance of payments data for Chile and for a set of comparable economies. We show that the inbound and outbound financial flows have been consistently balanced by long term funding, at least up to the year 2020, Chile showing a positive position on foreign portfolio investments grossly matched by a negative position on foreign direct investments. However, we document a systematic deficit in terms of returns and yields: inbound financing is more remunerative than outbound financing. The imbalance is especially salient as per the direct investments. The last part of the paper is devoted to a somewhat open discussion on whether a better matching of funds could be effected to the overall advantage of Chile, in what is called the 'inwardization' of domestic finance. Some economic policy considerations result. [ABSTRACT FROM AUTHOR]