Capital Outflow

DEFINITION of 'Capital Outflow'

The movement of assets out of a country. Capital outflow is considered undesirable and results from political or economic instability. It occurs when foreign and domestic investors sell off their assets in a particular country because they no longer perceive it as a safe investment. The capital is withdrawn from the country (flows out) and may end up in another country or back in the investor's home country.

BREAKING DOWN 'Capital Outflow'

Some countries implement capital controls to curb capital outflows. These controls are not really a solution because they can scare off investors who want control over their assets and can give the impression that something is wrong with the country's economy or government that is not yet widely known.

RELATED TERMS
  1. Current Account Deficit

    A measurement of a country’s trade in which the value of goods ...
  2. Currency

    Currency is a generally accepted form of money, including coins ...
  3. Capital Flight

    A large-scale exodus of financial assets and capital from a nation ...
  4. Capital

    1) Financial assets or the financial value of assets, such as ...
  5. Economic Capital

    The amount of capital that a firm, usually in financial services, ...
  6. Asset

    1. A resource with economic value that an individual, corporation ...
Related Articles
  1. Fundamental Analysis

    5 Predictions for the Chinese Stock Market in 2016

    Find out why market analysts are making these five ominous predictions about the Chinese stock market in 2016, and how it may impact the entire world.
  2. Professionals

    Controller: Career Path & Qualifications

    Find out what it takes to become a financial controller, starting with undergraduate educational requirements and moving into professional certification.
  3. Mutual Funds & ETFs

    Grading Bill Gross at Janus

    Learn about how Bill Gross, once the head of the largest mutual fund in the market, has had poor investment results at his new fund.
  4. Mutual Funds & ETFs

    TUR: iShares MSCI Turkey ETF

    Learn about the iShares MSCI Turkey exchange-traded fund, which invests in a wide variety of companies' equities traded on Turkish exchanges.
  5. Insurance

    Working Capital Works

    A company's efficiency, financial strength and cash-flow health show in its management of working capital.
  6. Forex Fundamentals

    What Causes A Currency Crisis?

    Find out what can cause a currency to collapse, and what central banks can do to help.
  7. Forex Education

    Dual And Multiple Exchange Rates 101

    Why would a country choose to implement dual or multiple exchange rates? It's risky, but it can work.
  8. Fundamental Analysis

    The 3 Best Investments When Bull Markets Slow Down

    Find out why no bull market lasts forever, and why investors should shift their assets away from growth and toward dividends when stocks slow down.
  9. Economics

    The 2007-08 Financial Crisis In Review

    Subprime lenders began filing for bankruptcy in 2007 -- more than 25 during February and March, alone.
  10. Economics

    Industries That Thrive On Recession

    Recessions are not equally hard on everyone. In fact, there are some industries that even flourish amid the adversity.
RELATED FAQS
  1. What is comparative advantage?

    Comparative advantage is an economic law that demonstrates the ways in which protectionism (mercantilism, at the time it ... Read Full Answer >>
  2. How does the Wall Street Journal prime rate forecast work?

    The prime rate forecast is also known as the consensus prime rate, or the average prime rate defined by the Wall Street Journal ... Read Full Answer >>
  3. What's the difference between microeconomics and macroeconomics?

    Microeconomics is generally the study of individuals and business decisions, macroeconomics looks at higher up country and ... Read Full Answer >>
  4. How do you make working capital adjustments in transfer pricing?

    Transfer pricing refers to prices that a multinational company or group charges a second party operating in a different tax ... Read Full Answer >>
  5. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  6. How do mutual funds work in India?

    Mutual funds in India work in much the same way as mutual funds in the United States. Like their American counterparts, Indian ... Read Full Answer >>
Hot Definitions
  1. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  2. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  3. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  4. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  5. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center