Free Capital Mobility and Capital Control :: Essays Papers

Economists, albeit, argue for free trade, but when it comes devour to the idea of untrammeled great come, it doesnt seem to get unhurt support. It is a natural phenomenon that almost everything we see in nature (i.e. fluid, air, and so forth travels pull d hold the concentration gradient. Same way, it had been thought that freeing international bully current would help the countries that are struggling economically as the capital should flow down the concentration gradient but in reality it doesnt quite happen that way. During the 1980s, worlds economic policy startrs habitual view was that money should move freely around the globe, allowing capital to follow the most profitable and productive investments, no matter what country thither happen to be in. Wessel, Davis, 1998 Even though policy makers want to make the world a safer place for free trade in goods, run and capital, according to Rodrik .. the idea of global capitalism is inherently impracticable. Capitalis m is, and leave remain, a national phenomenon. (Rodrik)Capital is the most heavy ingredient of a countrys economic existence. It is real important we understand what we really mean by the word capital. According to the Merriam- Webster dictionary, the etymology of the word capital says that in Medieval Latin this word came to mean the head of oxen or late(prenominal) livestock. De Soto in his book The Mystery of Capital suggests that the cows and the livestock are low maintenance possessions they are mobile and crumb be moved away from danger they can be counted etc. On top of it, they can generate incoming value by reproducing, or giving us milk, meat, leather, etc. Thus the word capital begins to do two jobs simultaneously- capturing the physical dimension of the assets (livestock) and its potential to generate future surplus (Paraphrased, De Soto, 2000 pg.40-41). So, capital of a country is a very important component for its stable economy. All the countries, rich and poo r, have capitals in their own place. But, some countries know how to inject life to their capitals while the rest of the other countries dont- and thats what makes all the difference.Economists have argued for free trade of goods and go for hundreds of years but free capital mobility is a fairly new phenomenon. We have learned that free trade of goods is beneficial for the consumer it also boosts large numbers living standard.