Talk:Capital flight

Needs a distinction from the term "capital mobility"[edit]

For the many people who have little or no education in economics - or for those who may have forgotten some concepts from a course they took many years ago - this article should make a distinction between "capital flight" and "capital mobility".Joel Russ (talk) 20:30, 14 May 2011 (UTC)[reply]

I'm not convinced there is a real distinction except whether the nation in question approves of the move. 72.53.96.54 (talk) 19:44, 14 June 2014 (UTC)[reply]

"Ultimately, the most benefited from capital flight are multinational banks."[edit]

While probably true, this is probably impossible to prove and I don't think it belongs on wikipedia 72.53.96.54 (talk) 19:43, 14 June 2014 (UTC)[reply]

Sources re GFI/Center for Applied Research study[edit]

czar 04:50, 19 January 2017 (UTC)[reply]

Mechanism[edit]

I have no economics training, and I'm left wondering how do capital assets leave a country? How does currency leave a country? Could this be explained in the article? To me, the page title seems a misnomer since a non-reserve currency has almost no utility outside of its issuing nation, so if it does ever leave, it is quickly repatriated. If it doesn't leave but is merely swapped for something internally, then it hasn't flown. If this is really about exchange rates shifting, could that be mentioned, please? "Capital flight" is a loaded term and sounds like a really bad thing, but a softening of a currency could be desirable, couldn't it? JBel (talk) 21:37, 11 July 2017 (UTC)[reply]

I don't have time to write up a section for the article but to explain it for you at any one time a significant amount of shares and government bonds in a country as well as property and other forms of investment will be foreign owned by individuals, banks, pension funds even governments. Together they amount to a certain amount of foreign capital (money) invested in the country supporting both private enterprises as well as public and corporate borrowing. For example in the UK in 2015 there was a net foreign investment of $33bn taking the total foreign owned investment to $1.4trn or 49.2% of GDP with about 6.8% of investment changing hands, in France there was $47bn with a total of $688bn 28.5% of GDP, the US had $348bn with a total of $5.57trn or 30.9% of GDP. When capital flight occurs those foreign investors take fright and sell up quickly and cheaply and few if any new investments enter the country to replace them leading to a large net outflow of capital from an economy. While that does indeed have the benefit to exporters of depressing the currency it also has the effect of making imports of raw materials and food more expensive, however more relevant to this article is that with a lack of foreign investors there is no one buying government and corporate bonds and shares meaning the money for investment and financing transactions has dried up. That means a Government will have a harder and more expensive time borrowing money to build a new motorway or hospital, companies will have a harder time sourcing the capital to fund new production machinery or new construction, etc... That is the effect of Capital flight at an international level, at a more local level it can also refer to investors deserting a failing industry (for example when the 2000 Dot-Com bubble in the US burst the NASDAQ fell 78% as $5trn in capital left the tech industry and 52% of internet firms went bankrupt as they could no longer find investment). WatcherZero (talk) 02:38, 12 July 2017 (UTC)[reply]

Distinction between capital flight and white flight and need for source[edit]

In section 1, subsection 2, "Within a country," the following lines are presented as examples of domestic capital flight: "Post-apartheid South African cities are probably the most visible example of this phenomenon as a result of high crime and violence rates in black majority cities, and flight of capital from central cities to the suburbs that ring them was also common throughout the second half of the twentieth century in the United States likewise as a result of crime and violence in inner cities." This is more properly white flight, which is a demographic change as much as an economic one. The mechanisms behind white flight in both mid-20th century USA and post-Apartheid South Africa are far more complex than simply white citizens with greater wealth fleeing crime-ridden areas. In the US, white flight was encouraged by numerous factors, not least of which were subsidies for both automobile ownership and infrastructure as well as suburban home ownership and shifting political attitudes. While I can't speak with any knowledge of South African cities, white flight is not a consequence of crime in majority-minority neighborhoods but more of an interrelated phenomenon. If the argument being made is that white flight in these countries is more or less synonymous with capital flight, and that these are the result of economic actors fleeing crime-ridden areas, at least one, and possibly several, sources are needed to support the contention. MDLXXXIII (talk) 01:35, 23 May 2020 (UTC)[reply]

Agreed. Moreover, this statement is an example editorialising, since it implies - without evidence - that black people are more likely to engage in violent and criminal activities than white people, and that this caused an outmigration of white people. "Post-apartheid South African cities are probably the most visible example of this phenomenon as a result of high crime and violence rates in black majority cities, and flight of capital from central cities to the suburbs that ring them was also common throughout the second half of the twentieth century in the United States likewise as a result of crime and violence in inner cities" Airmonkey1591 (talk) 11:33, 20 March 2022 (UTC)[reply]