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Capital controls were an integral part of the Bretton Woods system which emerged after World War II and lasted until the early 1970s. This period was the first time capital controls had been endorsed by mainstream economics. Capital controls were relatively easy to impose, in part because international capital markets were less active in ...
As capital controls are reduced, the modern world has begun to look a lot less like the world modelled by Heckscher and Ohlin. It has been argued that capital mobility undermines the case for free trade itself, see: Capital mobility and comparative advantage Free trade critique. Capital is mobile when: There are limited exchange controls
Ronald W. Jones and José Scheinkman show that under very general conditions the factor returns change with output prices as predicted by the theorem. [2] If considering the change in real returns under increased international trade a robust finding of the theorem is that returns to the scarce factor will go down, ceteris paribus .
Prudential capital controls are typical ways of prudential regulation that takes the form of capital controls and regulates a country's capital account inflows. Prudential capital controls aim to mitigate systemic risk , reduce business cycle volatility, increase macroeconomic stability, and enhance social welfare .
A theory of change developed at the outset is best at informing the planning of an initiative. Having worked out a change model, practitioners can make more informed decisions about strategy and tactics. As monitoring and evaluation data become available, stakeholders can periodically refine the theory of change as the evidence indicates. A ...
Risk sensitivity - Capital requirements based on internal estimates are more sensitive to the credit risk in the bank's portfolio of assets; Incentive compatibility - Banks must adopt better risk management techniques to control the credit risk in their portfolio to minimize regulatory capital; To use this approach, a bank must take two major ...
The Cambridge capital controversy, sometimes called "the capital controversy" [1] or "the two Cambridges debate", [2] was a dispute between proponents of two differing theoretical and mathematical positions in economics that started in the 1950s and lasted well into the 1960s.
The Modigliani–Miller theorem (of Franco Modigliani, Merton Miller) is an influential element of economic theory; it forms the basis for modern thinking on capital structure. [1] The basic theorem states that in the absence of taxes , bankruptcy costs, agency costs , and asymmetric information , and in an efficient market , the enterprise ...