ANALYSIS OF INTERNATIONAL CAPITAL FLOWS: CHALLENGES AND PROSPECTS

Researchers analyze various aspects of international capital flows. There are different methods and approaches to the analysis of international capital flows and description of their nature and processes. Many researchers attempt to identify relations between international capital flows and economic growth. Western, mainly American, economists succeeded in development of capital flow models. In Russian research, this approach is ill-defined which can have a negative impact on adaptation of the Russian economy to rapidly changing global processes. International capital flow control measures can be divided into administrative (direct) and market (indirect) ones. Besides, different economic tools are applied. The government exercises administrative control for limiting financial transfers by means of direct prohibitions. The indirect measures influence capital circulation through the cost system, currency rates, explicit and implicit taxation, price control methods which determine costs and scale of financial transactions. At the same time, to control short-term capital inflows, it is necessary to constantly apply various control methods due to their low efficiency (as counterparties of the financial market always find potential loopholes) which increases administrative expenditure. It is uncontroversial that foreign investment becomes more crucial for economic development of the country (Blackburn & Hung, 1998). Under the global economic integration and capital mobility increase, foreign investment can accelerate economic growth. The article analyzes various international capital flow control tools, identifies key problems and suggests solutions. (c) 2018 Published by Future Academy www.FutureAcademy.org.UK