Investopedia

Continue to Site »

Capital Blockade

Filed Under » ,
Dictionary Says

Definition of 'Capital Blockade'

A form of economic sanction in which a country or a group of countries attempt to limit or entirely stop the amount of investment capital going into another country that is seen to be performing questionable actions. The main goal of a capital blockade is to hurt the offending country's economic growth to the point where it will agree to meet and resolve the issue(s) at hand.
Investopedia Says

Investopedia explains 'Capital Blockade'

Since most countries rely upon foreign investment for economic growth, cutting off such funds may be an effective and relatively peaceful method of getting all parties back to the bargaining table without escalating to armed conflict. This type of economic sanction can be combined with freezing foreign bank accounts that belong to the target country's citizens in order to put more pressure on the situation.

However, employing a capital blockade will only be effective if the vast majority of countries investing in the target country are willing to stop the flow of investment capital into the target country.

Articles Of Interest

  1.

    What Is International Trade?

    Everyone's talking about globalization, so we explain what is it and why some oppose it.

  2. Digging Deeper: The Mutual Fund Prospectus

    The legal jargon of this document can be daunting. Find out how to get to the important stuff.

  3. Why Country Funds Are So Risky

    High returns come at a price, but country funds may still be a good bet.

  4. What Is The World Trade Organization?

    The WTO sets the global rules of trade. But what exactly does it do and why do so many oppose it?

  5. Inspecting A Country's Debt

    Tensions over just how to handle debt are pitting the rich world against the developing world like never before.

  6. Exploring Non-Dollar Currencies For Forex Trading

    Learn how investments in foreign currencies can diversify your portfolio.

  7. Emerging Markets' Environmental Commitment

    Most people think of the industrial and developed world as leaders when it comes to green technologies and environmental stewardship. After moving past their high-growth stages, many developed ...

  8. A Look Into Foreign Direct Investment Trends

    Foreign direct investments play an increasingly important role in countries as an indicator for a healthy economy in terms of economic growth and long-term capital movement.

  9. Why China's Currency Tangos With The USD

    Congress often debates pressuring China to appreciate its currency, but the yuan/dollar peg has benefits for both countries.

  10. Emerging Market ETFs For Your Retirement Accounts

    Emerging market ETFs are typically seen as riskier investments, but some of them may be able to strengthen your retirement accounts.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  2. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  3. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  4. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  5. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  6. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
Trading Center