What's it: Perfect capital mobility describes a hypothetical scenario where capital, such as money and investments, can move freely across borders without restrictions. In this ideal world, there are no barriers to entry or exit for capital flows.
International Capital Flow
Foreign Investment: Boosting Growth & Risks (Types: Direct vs. Portfolio + Pros, Cons)
What's it? Foreign investment is an investment by foreigners in the domestic economy expecting some benefit in the future. The two main categories are foreign direct investment and foreign portfolio investment.Direct investment involves control
Capital Flow Restriction: Safeguard or Stranglehold? Impact on Investments & Economy – Types, Pros, Cons
What's it? Capital flow restriction is controls that limit the ability of certain parties to invest or transfer their capital. Although this generally applies to foreign investment, the government can also restrict citizens from investing
Foreign Portfolio Investment: Diversify Globally & Earn Returns (Types, Pros and Cons)
What's it: Foreign portfolio investment refers to short-term investment in financial instruments (such as stocks and bonds) in another country. For purchases on the stock market, this investment does not give the investor direct control and
International Fisher Effect: Predicting Currency Movements (Formula, Criticisms)
What's it? The International Fisher Effect shows that changes in the exchange rates of two currencies correlate with the difference in nominal interest rates between the two countries. The term is named after its inventor, Irving Fisher, an American
Capital Outflow: Risks & Solutions (Factors, Impact on Exchange Rates)
What's it: Capital outflow refers to the going-out capital from a country. If a massive outflow of capital occurs, we call it a capital flight. Several factors trigger capital outflows, which are generally attributed to a combination of
Capital Flow Control: Balancing Stability vs. Growth (Pros, Cons & Examples)
What's it? Capital flow control, often shortened to capital control, is a tool employed by governments and central banks to manage the movement of money across their borders. This strategy aims to influence the flow of capital, which encompasses
Foreign Direct Investment (FDI): Benefits, Drawbacks & How Countries Attract FDI
What's it: Foreign direct investment (FDI) is a type of capital flow where investors from outside a country invest in its productive assets. Investors can come from companies or individuals. Companies they become multinational companies because they