Flow (Capital)
Movement of investment money; direction and quantity.
Formula
Net Capital Flow = Capital Inflows − Capital Outflows
Real World
When Apple moved billions in profits from Ireland back to the US in 2018 following Trump's Tax Cuts and Jobs Act, it represented a massive capital outflow from Europe into the US economy.
Exam Focus
Distinguish clearly between FDI (long-term, productive) and portfolio investment (short-term, financial) — examiners reward this precision.
How well did you know this?