Net capital export

from Wikipedia, the free encyclopedia

A net capital export occurs when the capital exports of an economy (increase in claims against foreigners, e.g. in the form of supplier credits or decrease in liabilities) exceed capital imports (increase in liabilities towards foreigners or decrease in claims) in terms of value within a certain period of time.

The balance of the capital account (capital account in the broader sense = capital account balance + foreign exchange balance ) is negative in this case (KB <0).

A net capital export reflects the financing side of a current account surplus, as the foreign economies borrow domestically to finance domestic imports (equivalent to domestic exports). With a flexible exchange rate (no central bank intervention and therefore a balanced foreign exchange balance), LB = -K is always exactly LB = -K because of the DB = 0, Z = LB + K + DB and Z = 0 ex post because of the double-entry bookkeeping, i.e. a current account surplus always goes with it an equally high net capital export and vice versa.

A negative balance of the financial account improves the net external position of an economy, that is a positive change in the Forderungen- and liabilities inventory vis.

In connection with ongoing net capital exports, there is often talk of so-called capital flight . This can be due to persistently poor investment conditions in Germany, for example due to an increased risk discount on the interest rate due to a lack of institutional collateral. In this case, portfolio and direct investments are mainly made abroad. This harbors risks of damage to the development of an economy, since private savings are permanently withdrawn from the domestic economy.

  • Z = balance of payments
  • LB = balance of the current account
  • KB = balance of the capital account in the broader sense ( capital account and foreign exchange account )
  • K = balance of the capital account (capital account in the narrower sense)
  • DB = balance of the central bank's foreign exchange balance sheet (positive balance = decrease in currency reserves)