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Capital Flows from the 1990s to the Current Day

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Abstract

Global capital flows have gone from Lucas in the early 1990s when he posed the question: ‘Why doesn’t capital flow from rich to poor countries?’1 to the current global paradox of capital that flows ‘upstream’ from emerging market economies to the developed world. Obviously, two countries come to mind almost instantly and that’s China’s capital flows into the United States and China. With that said, the lion’s share of these funds is earmarked for the purchase of US treasury securities. There are additional capital flows which are for portfolio investment other than US treasuries and there are Chinese capital flows earmarked for foreign direct investment. The specifics of each breakdown will be covered later in the book.

Keywords

Foreign Direct Investment Monetary Policy Share Variation Capital Flow Capital Inflow 
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Notes

  1. 1.
    Lucas, Robert Jr. (1990) ‘Why Doesn’t Capital Flow from Rich to Poor Countries?’ American Economic Association in its journal American Economic Review, Vol. 80, May 2nd issue.Google Scholar
  2. 6.
    Aguiar, Mark and Gita Gopinath (2007) ‘Emerging Market Business Cycles: The Cycle Is the Trend’ Journal of Political Economy Vol. 115 No 1, pp. 69–102.CrossRefGoogle Scholar
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    Hammond, Gill, Ravi Kanbur, and Eswar Prasad (2009) Monetary Policy Frameworks for Emerging Markets. Northampton, MA: Edward Elgar Publishing.CrossRefGoogle Scholar
  4. 10.
    Chandrasekhar, C. P. and Jayati Ghosh (2011) ‘Revisiting Capital Flows’, International Developments Economics Associates May 5, p. 2.Google Scholar
  5. 11.
    International Monetary Fund (2011) World Economic Outlook April, p. 134.Google Scholar
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    International Monetary Fund (2011), World Economic Outlook April, p. 141.Google Scholar
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    Chen, H., H. L. Jonung and O. Unteroberdoerster (2009) ‘Lessons for China from Financial Liberalization in Scandinavia’ European Commission Economic Papers, No. 383. p. 11.Google Scholar
  8. 18.
    Chandrasekhar, C. P. and Jayati Ghosh (2011) ‘Revisiting Capital Flows’, International Developments Economics Associates May 5, pp. 2–3.Google Scholar
  9. 22.
    Chen, H., H. L. Jonung and O Unteroberdoerster (2009) ‘Lessons for China from Financial Liberalization in Scandinavia’. European Commission Economic Papers, No. 383, pp. 12–15.Google Scholar
  10. 26.
    Aykut, Dilek(2011) ‘Outward FDI from Developing Countries Are Up, Notably South-South Flows’ Prospects for Development, World Bank, Washington, DC. February 2. pp. 1–2.Google Scholar

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© Rich Marino 2013

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