International Capital Mobility Essay examples - 2849 Words

International Capital Mobility â€Å"Globalization is todays reality. Like it or not, the move to a world economy is a fact of life. At some point in the 1990s the process achieved critical mass and people started to sit up and take notice. Many were apprehensive. Today, almost all of us are aware that our lives are being shaped by an interconnected world economy of cross-border flows of trade, finance and technology. In our hearts, we know that there is no going back.† -Maria Livanos Cattaui, Secretary General of the International Chamber of Commerce. As evidenced by the above quotation, any analysis of the central economic issues of our time is incomplete without a clear understanding of the increasing†¦show more content†¦They claim that international capital mobility, or, the ability of investors to freely allocate capital around the globe, engenders promise, while simultaneously entailing peril. This paper will attempt to address the arguments of both sides to foster greater comprehension. Before proceeding it is crucial to define the term â€Å"capital†. According to the Merriam Webster Dictionary, it is â€Å"invested savings used in the process of production, or money used to bring in income.† Investors around the world hold various assets to earn economic returns. The funds they loan out finance growth and development of economies abroad. It is their hope that they correctly allocate their wealth so that they can profit from sound investment. Emerging economies, nascent industries, etc. hope that they receive adequate funding to facilitate their development. Without it, they would stagnate and collapse. Capital is the lifeblood of an economy; its significance to economic growth cannot be overestimated or overstated. Having said this, it is necessary to observe the consequences of the global movement of capital, i.e., the liquid lending and borrowing that keep economies afloat. History presents many examples of the bounty it creates. For example, during the nineteenth century, capital flows were responsible for the development of the western United States, Australia, New Zealand, Chile, South Africa, and parts of Canada.1 Opponents, while concurringShow MoreRelatedEssay about International Capital Mobility1764 Words   |  8 PagesInternational Capital Mobility International Capital mobility- the free flow of investment financing from one country to another is a hot topic in the world of economics. A common question that rises when discussing this matter is, does capital mobility benefit developing countries? As with most other subjects the answers tend to vary. In this paper I will shine light on the point of view of two respectable economists concerning the positive and negative affects associated with capital mobilityRead MoreInternational Economics Essay1147 Words   |  5 Pages In investigating the flow of goods and services across borders and the international economy as a whole it’s necessary to not only observe the economic factors that drives such flows but also the political aspects as well. Despite the relatively free flow of capital, goods, and services that benefit the global economy today, this has only been a recent development. Prior to the late twentieth century high tariffs and low quotas were prevalent throughout the developed world. Though such policiesRead MoreBenefits Of Developing Countries Adopting Capital Controls During A Recession1529 Words   |  7 PagesCapital control is defined as a type of measure governments can use to regulate and restrict the amount of money flowing from capital markets in order t o keep inflation under control while maintaining a competitive real exchange rate. International Monetary Fund (IMF) has been slowly shifting its beliefs to where capital control policies can be deemed useful for countries during a potential crisis. Some countries, especially the developing ones that implemented capital control policies have experiencedRead MoreTransportation, Globalization And International Trade1671 Words   |  7 PagesHome Contents Chapter 5 Concept 2 Transportation, Globalization and International Trade Author: Dr. Jean-Paul Rodrigue 1. The Flows of Globalization In a global economy, no nation is self-sufficient. Each is involved at different levels in trade to sell what it produces, to acquire what it lacks and also to produce more efficiently in some economic sectors than its trade partners. International Trade. An exchange of goods or services across national jurisdictions. Inbound trade is definedRead MoreTest Bank: International Economic1116 Words   |  5 PagesSovereignity- supreme amp; independent power or authority in government as possessed or claimed by a state or community. Being sovereign nations can be more indifferent to the interests of others. As long as nations exist, international economics will always need a separate body of analysis distinct from the rest of economies. Globalization- worldwide integration amp; development; extending to other or all parts of the world Euro Benefits * Low interest rates due to a high degree ofRead MoreInternational Monetary Policy : Effects On Cross Regional Mergers And Acquisitions1511 Words   |  7 PagesInternational Monetary Policy: Effects on Cross-Regional Mergers and Acquisitions in 2015 The Murdell-Flemming Trilemma or â€Å"Unholy Trinity† states that a government can only generate policy that satisfies two of three general desires; these desires are exchange rate stability, capital mobility, and domestic monetary autonomy (Cohen, 2010). Concerning the China, the general international monetary choices should be capital mobility and domestic monetary autonomy. In an era where multinational corporationsRead MoreArticle Analysis: On the Contradictions of the New International Financial Architecture: Another Procrustean Bed for Emerging Markets?1404 Words   |  6 PagesSummary: what is a main concept in the case or article? The main concept of the article is to explain why the New International Financial Architecture (NIFA) was created and who is being benefited from this approach. The discussion begins with an examination of the power structures of the global political economy by focusing on the continued dominance of the USA. The article presents the contradictory relations between USA and global finance will be explored so as to shed more critical lightRead MoreThe Concept Of Brain Drain, Brain Gain And Brain Drain1104 Words   |  5 Pagesacademics, and scholars as they left their homes to study abroad, when they remained in their host countries, and when they continued to work both at home and internationally. Brian circulation has been the term used to describe the movement and mobility of higher educated people around the globe. It has been an increasing phenomenon that has affected the socio-economic and socio-cultural progress of a society and a country, as well as the world (Teferra, 2005). Ozden and Schiff (2005) along withRead MoreReview Of Robert Mundell s Trilemma Essay1541 Words   |  7 PagesSection I: Exchange Rates Paper Robert Mundell’s Trilemma, also known as the Impossible Trinity, states that a nation cannot realize monetary policy autonomy, free capital movements, and exchange rate stability at the same time. While either of the two goals can combine and actualize in any given period, as a simultaneous and three-fold effort, each objective cannot coexist. Together they are simply incompatible. Thus, and holding true to the tradeoff-nature of economics, Mundell’s undisputed theoryRead MoreThe Two Waves of Globalization: Industrial Revelution and De-Industrialization685 Words   |  3 Pagesfundamentally different.† The first wave occurred during 1870-1914 and the second from 1960 to present. The superficial similarities between the two include the aggregate trade-to-GDP ratio and capital flow-to-GDP ratios in addition to the importance of reductions in technical and policy barriers to international trade. The fundamental differences, on the other hand, are the impact reducti ons had on trade and the economic beliefs and initial conditions of the two periods. The first wave of globalization