Hello,
I am currently learning about international economics and I don't seem to get my head around the identity of net capital outflows and net exports. Let's say, if Apple sells a Mac in Russia and simply converts those rubles to dollars and brings them back to the U.S., how does this transaction increase net capital outflows? Thanks in advance.
I understand that NCO = foreign assets purchased by domestic residents - domestic assets purchased by foreign residents. However what are these ‘assets’.
Also let’s say the US exports a good to China. That Good counts towards Net Exports. In exchange the US receives chines currency and this counts as a capital outflow. Here, the US has an inflow of Chinese currency, why is it called an outflow? What is the capital referring to?
I know that if national savings is held constant, net capital outflow and investment will move in opposite directions [because savings = investment + nco] ; therefore, I've eliminated choices b and d. Also, I know that an increase in Canada's real interest rate will increase the supply of US dollars, but I'm not sure how this relates to net capital outflow. My current guess is c.
National savings in US is equal to 40 billion dollars. Suppose US is an open economy and the real interest rate on Canada bonds increases. All else equal, what would we expect to happen to US investment and net capital outflow?
a. Net capital outflow decreases and US investment increases.
b. Net capital outflow increases and US investment increases.
c. Net capital outflow increases and US investment decreases.
d. Net capital outflow decreases and US investment decreases.
Citadel is experiencing the worst PR week of its existence.
Its CEO has been trending relentlessly for lying to the House Financial Committee.
In response they have issued highly caveated tweets to reject the allegations, which combined with the Streisland effect, makes them look even less trustworthy than saying nothing.
If you were a rival Hedge Fund, would you let poor Kenny lick his wounds? NO. You would absolutely exploit this moment of weakness by trying to poach as many of Citadel’s high net worth clients as possible. You probably have a database of their contact details. You probably have account managers on the phone right now setting up dinners, meetings, cocktails, whatever to get them in a room and to convince them to withdraw all funds from Citadel and to invest instead in another HF not face down in the shit.
What happens when a millionaire/billionaire client starts to get nervous? Starts to express sentiments of pulling out funds? Along with the obvious panic it creates across the client base, it will require immediate senior staff engagement to mitigate. This can’t be handed over to some intern. They will demand to speak to the seniors, heck some will want to talk to Ken himself! I bet a significant amount of senior director level resource is currently focussed on trying to calm their clients the fuck down - to no avail. Every hour of their time is expensive. What to us is a meme, to them requires pissing significant resource away to control the fire. Ken Griffin trending for lying not only costs them money but also the precious time needed to focus on their other problems like apes DRSing shares non-stop.
tl;dr: The memes have real power. Ken Griffin is now fighting a war on multiple fronts, including trying to convince his clients to stay in the face of unrelentingly bad PR. The capital outflow is probably making them vomit right now. And like rats from a sinking ship we should expect more senior level departures.
No dates, but I’m feeling good, feeling great!
This is something I'm trying to wrap my head around & confirm my understanding of, but I couldn't find discussion of it.
Imagine a mutual fund with only 2 equally-invested shareholders holding the fund in taxable accounts. It's not a Vanguard mutual fund with an ETF share class, so it's liable to distribute realized capital gains to investors.
To simplify this thought exercise, both investors invested in the fund on its inception date, around the start of a year. The fund's buy-and-hold portfolio rose in value that year.
Investor A sells their holdings later that year, before the fund's record date for distributions. They realize short-term capital gains reflecting the increase in value of their share of the fund's holdings, and these are taxable as ordinary income.
The fund sold half of its holdings to satisfy that outflow. Investor B gets saddled with a capital gains distribution equivalent to investor A's gains (the increase in value of A's share of the holdings). This distribution is classified as short-term gains, and taxable as ordinary income.
Is it correct to conclude that in this scenario, the gains were taxed twice (once to the investor realizing them by exiting the fund, once to the investor remaining in the fund)? And that, more generally, outflows may result in double taxation of gains realized to satisfy those, to the extent the exiting & remaining investors are in taxable accounts?
I have heard two conflicting explanations regarding the relationship between real interest rate (r) and net capital outflow (NCO). Could someone clear it out for me?
Some claim that an increase in r will encourage savings and discourage investments aboard. Therefore an r increase will decrease NCO.
However another derivation yields opposite result. By S-I=NX, and the fact that S increases and I decreases when r rises, we can conclude that NX rises as r rises. By balance of payment (CA≡-KA), NX=NCO. In conclusion, NCO rises when r rises, which contradicts the arguement aforementioned.
I cannot see flaws in both arguements, so what is the relationship between r and NCO? Thank you in advance.
I'm taking an introductory course on macroeconomics, and we've studied the marker for loanable funds in a closed and an open economy.
In a closed economy, the higher the real interest rate is, the less attractive private investment becomes. I've no problem with that.
However in an open economy, when we compare two countries, and the real interest rate increases in one with respect to the other, this generates a net capital outflow from the country with the lower interest to the one with the higher. Why does this happen? Shouldn't the country with the lower interest rate receive more foreign investment?
S-I=NX
Why does an decrease in the supply of dollars to be lent abroad increase the real exchange rate? Is this just because of scarcity of the dollar? It seems axiomatic that scarce currency is more expensive but I just don't see the intuitive reasoning. Is it like unchanged demand for US goods (and therefore dollars) but a lower supply of dollars means the dollars are going to be more expensive in terms of foreign currency, and so the goods are going to be more expensive per foreign good, and therefore the RER is greater because US goods are worth more foreign goods? I think this is probably right actually-- an increase in the nominal exchange rate and thus the RER because of a scarcer dollar in the market for currency exchange/foreign investment.
I understand that an exporter invests in foreign currency in accepting payment, and an importer reduces national saving by increasing C while keeping Y constant, but it was less intuitive at first to see how changing S or I affects NX.
I'd appreciate if you could let me know if this is right or not. Thanks!
Why is it when there is capital flight and net capital outflow increases, that the domestic interest rates increase?
But when the domestic interest rates rise, net capital outflow decreases.
Do interest rates rise when there is capital flight because they are trying to retain their domestic investments? Domestic interest rates and nco seem to have a negative relationship otherwise, it's just this aspect which becomes confusing.
Also how does net capital outflow ever tie back into the supply of the dollar? I do not understand how when net capital outflow goes up, the supply of the dollar goes up as well. Should anything even be happening? If anything there is less of a supply of dollars now, no? I mean in the market for foreign currency exchange that is..
This is the best tl;dr I could make, original reduced by 84%. (I'm a bot)
> The Centre told Parliament in December 2021 that nearly nine lakh Indians, an average of 350 a day, gave up their Indian passports since 2015.
> Nearly 5,000 Indian millionaires, 2 per cent of its high-net-worth individuals, moved abroad in 2020, a report by the Global Wealth Migration Review found.
> A 2008 study published in the Bulletin of the World Health Organisation found that 54 per cent of doctors who graduated from New Delhi's All India Institute of Medical Sciences from 1989 to 2000 are in the US. It said Indians comprise nearly 5 per cent of doctors in the UK and about 10 per cent in the US. Another research has found that.
> In a nutshell, it now provides better research infrastructure, grants and resources to Indian scientists and opportunities for overseas scientists of Indian origin to return.
> In February 2020, the government said, "Out of total 103 senior research associateships awarded by the Council of Scientific & Industrial Research in 2019, 28 per cent were awarded to young Indian researchers who had been working abroad.".
> Governments have taken pride in the existence of a vibrant 3.2 crore strong diaspora, comprising non-resident Indians and people of Indian origin.
Summary Source | FAQ | Feedback | Top keywords: Indian^#1 government^#2 abroad^#3 lakh^#4 India^#5
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... keep reading on reddit ➡I want to see the cumulative totals and money in and out of the domestic equity market. Cboe has information like this but it is in table format and the chart is not scalable . I want to compare overall volume levels across all equities not just spy nasdaq dj etc. I understand what I am asking is somewhat broad. This is the closest (below) I can find...Anyone have another source that is more chart friendly?https://www.cboe.com/us/equities/market_statistics/
