What's it: Perfect capital mobility is a situation where capital is free to move in pursuit of higher returns. There are no barriers to capital in and out of a country or between uses, including exchange rate barriers. Why is
International Capital Flow
Foreign Investment: Types, Attracting Factors, Pros, Cons
What's it: Foreign investment is an investment by foreigners into the domestic economy expecting some benefit in the future. The two main categories are a foreign direct investment and foreign portfolio investment. Direct investment
Capital Flow Restriction: Meaning, Types, Pros, and Cons
What's it: Capital flow restriction is re controls that are in place to limit the ability of certain parties to invest or transfer their capital. Although this generally applies to foreign investment, the government can also restrict
Foreign Portfolio Investment: Examples, 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 example, US investors buy Indonesian government bonds or shares on the Indonesia Stock
International Fisher Effect: Meaning, Formula, Examples, Criticisms
What's it: International Fisher Effect shows you the changes in the exchange rates of two currencies correlate with the difference in nominal interest rates between the two countries. The term is by the name of its inventor,
Capital Outflow: Meaning, Determinants, and Impacts
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
Capital Flow Control: Meaning, How It Works, Pros and Cons
What's it: Capital flow control, or we will briefly call it capital control, is any action taken by the government, central bank, or other regulatory body to limit the flow of capital in the domestic economy. Control can take forms
Foreign Direct Investment: Types, Pros, and Cons
What's it: Foreign direct investment (FDI) is a type of investment in a country's productive assets by foreign investors. Investors can come from companies or individuals. For companies, they become multinational companies because they