The theory says that free capital flows allow savings to be directed – by the invisible hand of the financial markets – to wherever they will be most profitably employed. In this way, savers get a better return on their nest egg, while underdeveloped economies receive the financial leg-up they need. And as firms from one country take over those of another, they bring much-needed expertise as well as help new ideas to be adopted rapidly worldwide.
Except that isn’t what’s been happening: instead, for the past decade and more, savings have been pouring uphill from poor countries to rich. more> http://tinyurl.com/8yw5b3s
- Jon Heavey: Follow the Money (huffingtonpost.com)
- There will be shocks (economist.com)
- The risks in Indian dependence on foreign risk capital (jrvarma.wordpress.com)