1. International Capital Flows -
Definition
 Capital and Capital Flows Can Be Defined as Below:
Capital is one of the factors of production (labor and land are
the others) and it is the most mobile of them on international
level
International capital Flow is any transfer of capital between
countries (with the goal of obtaining extra profit)

2. Types/Sources Of
International Capital
Movement

3. • Demand deposits,
• Bills,
• Overdraft,
• Loan & commercial bank credits,
• Commercial & financial papers
and acceptance.
Short-Term
Capital
Movements
• Direct investments,
• Portfolio investments,
• Assistance from governments &
institutions.
Long-Term
Capital
Movements

4. Financing On Trade In
Goods
Financing On Trade In
Services
Financing On Assets

5. Composition Of Capital
And Financial Flows

6. 1) Capital
investment
2) Portfolio
investment in
either debt or
equality
securities
3) Direct
investment in
domestic
firms (FDI)
including
start-ups
4) Changes in
international
reserves

7. History Of International
Capital Flow

8. 100 100 100 200 100 100 100 100 100
2700 3000
4100
4600 5100
6900
4700
3700
5200
400
700
800
150
800
1000
400
400
1000
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
1995 996 1997 1998 1999 2000 2001 2002 2003
$BILLIONS
Figure 1: World Financial Flows
LDC INDUSTRIAL INT. ORG.

9. -600
-500
-400
-300
-200
-100
0
100
200
300
1995 1996 1997 1998 1999 2000 2001 2002 2003
$BILLIONS
Figure 2: Current Account Balances (CABs)
U.S. CAB NON U.S. INDUSTRIAL COUNTRIES' CAB LDCS' CAB