Normal and Abnormal International Capital Transfers

Normal and Abnormal International Capital Transfers

MARCO FANNO
Volume: 1
Copyright Date: 1939
Edition: NED - New edition
Pages: 132
https://www.jstor.org/stable/10.5749/j.cttts9k8
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  • Book Info
    Normal and Abnormal International Capital Transfers
    Book Description:

    “The first in a series of studies in Dynamic Economics. ... Realistic, penetrating, path-breaking work.” --Southern Economic Journal Recommended by ALA Booklist

    eISBN: 978-1-4529-3625-3
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-x)
  2. Table of Contents
    (pp. xi-xii)
  3. Chapter I INTERNATIONAL EXCHANGE AND CAPITAL TRANSFERS
    (pp. 1-10)

    The objects of international exchange and transfer may be services, commodities, gold, or securities.¹ Fixed assets are not subject to such transfer, for obvious reasons. What is transferred, in cases in which fixed assets are the object of exchange, is simply the property rights in these assets.

    Commodities and services have, for the most part, a market and a price in each country. The exchange of commodities and services between one country and another creates, for the countries which are importers and exporters, respectively, of these products and services, a credit and a debit, the amount of which in the...

  4. Chapter II NORMAL CAPITAL TRANSFERS
    (pp. 11-30)

    The possible situations with respect to the balance of international payments, examined in the preceding chapter, in the presence of which normal capital transfers take place, may result from (1) sudden and accidental disturbances or (2) permanent economic conditions. In the first case we have to do with short-period transfers, in the second with long-period transfers.

    Sudden and accidental disturbances may take the form of crop failures, prolonged strikes, the unexpected closing of important markets, and so on. When they occur, it is difficult for the country subjected to them to re-establish equilibrium at once in its balance of payments,...

  5. Chapter III ABNORMAL CAPITAL TRANSFERS
    (pp. 31-32)

    As has already been indicated, I callabnormalthose capital transfers which result,notfrom differences in the net rates of interest prevailing in the various countries, but from other causes and conditions. Chief among the latter are: (1) the payment of a war indemnity or the repayment of foreign debts contracted in connection with a war, (2) the introduction, or an increase in the amount, of a levy on capital, or even the mere fear of the introduction of, or an increase in, such a levy,¹ (3) the fear of political or social revolutions in one or more countries,...

  6. Chapter IV INDEMNITIES AND THE REPAYMENT OF WAR DEBTS
    (pp. 33-48)

    The problems arising out of this group of abnormal capital transfers have to do, as in the case of normal capital transfers, with theobject, thelimits, themechanism, and theeffectsof such transfers, and it is under these four aspects that we shall study them.

    The obligations associated with indemnities or the repayment of war debts are intergovernmental obligations. The transfers resulting from the payment of these obligations must, therefore, be effected by the government or governments of the debtor countries. In order to accomplish this purpose, the debtor states must solve two problems (1) the problem of...

  7. Chapter V THE FLIGHT OF CAPITAL
    (pp. 49-71)

    Under the term “flights of capital” are included, as we have seen (page 11 above), abnormal capital transfers other than those associated with the payment of indemnities and war debts: that is, those transfers — sudden, disorganized, violent, variable as to amount and direction — which the public, seized by panic for some reason or other, effects or tries to effect in order to avoid if possible the partial or total loss of the capital owned or invested by them in a given country. For this group of transfers we must determine: (1) the object, (2) the repercussions in the...

  8. Chapter VI THE FREEZING OF FOREIGN DEBTS
    (pp. 72-83)

    The freezing of foreign debts is usually the consequence of a flight of capital. It results, however, not from a flight of foreign capital which had previously taken refuge in a given country in search of temporary shelter, or of domestic capital which flees in order to take refuge abroad, but from a flight of foreign capital which had previously come into the country as part of a normal transfer — that is, as a loan in the strict sense of the term — and which, at a given moment, no longer feeling safe, tries to leave that country. In...

  9. Chapter VII FLIGHTS OF CAPITAL, THE FREEZING OF FOREIGN DEBTS, AND CRISES
    (pp. 84-102)

    Having examined separately the consequences of flights of capital and of the freezing of foreign debts, we shall now go on to study both of these phenomena together, with the purpose of reconstructing a complete picture of all their effects.

    The tendency of the public to keep its savings in liquid form, as a result of a general lack of confidence, brings about, as we have seen, the formation of an exceptional amount of bank deposits. Now, this condition, which can take place only through the disinvestment, in the ways and at the pace which are technically possible, of capital...

  10. Chapter VIII ABNORMAL CAPITAL TRANSFERS AND THE INTERNATIONAL DISTRIBUTION OF GOLD
    (pp. 103-109)

    The study of abnormal capital transfers, to which the present volume is devoted, is important not only because it helps to clarify some of the salient aspects of contemporary economic life, but also because it opens the way to the solution of some fundamental theoretical problems.

    We have seen (pages 59–61 above) that abnormal capital transfers take place principally in gold and that they tend, therefore, to reduce the metallic reserves of the countries from which the capital flees. We have seen also, however, that the countries which the capital enters utilize only in small part the gold which...

  11. APPENDIX
    (pp. 110-116)
  12. Author Index
    (pp. 117-118)
  13. Subject Index
    (pp. 119-120)