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International Capital Flow

Perfect Capital Mobility: Ideal & Reality (Exchange Rates, Effects)

August 18, 2024 · Ahmad Nasrudin

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.

Foreign Investment: Boosting Growth & Risks (Types: Direct vs. Portfolio + Pros, Cons)

January 22, 2025 · Ahmad Nasrudin

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

January 21, 2025 · Ahmad Nasrudin

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)

January 22, 2025 · Ahmad Nasrudin

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)

January 21, 2025 · Ahmad Nasrudin

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)

January 22, 2025 · Ahmad Nasrudin

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)

January 22, 2025 · Ahmad Nasrudin

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

January 21, 2025 · Ahmad Nasrudin

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

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