Academic literature on the topic 'GDP and capital outflow'

In the context of globalization, the level of capital mobility and the introduction of financial markets has sharply increased, which has led to a large outflow of resources from the country. Therefore, such a process at any time was and remains one of the most important and relevant.

AbstractThis chapter provides and analyses new estimates of net capital stock and services for Spain over the last 170 years. The net capital (wealth) stock-GDP ratio rose over time and doubled in the last half a century. Capital services grew fast over the long run, accelerating in the 1920s and from the mid-1950s to 2007. Until 1975, their acceleration was assisted by an increase in the ‘quality’ of capital. Capital deepening proceeded steadily, accelerating from 1955 to 1985, and slowed down thereafter, for expanding sectors attracted less investment-specific technological progress. Although capital consumption rose over time, the rate of depreciation fell from 1970 to 2007, as the relative prices of new capital goods’ declined due to embodied technological change.

L. Ferrari and V. Meliciani in Chapter 10 propose a new “quality” of public spending (public spending for future generations) measure which goes beyond the traditional distinction made between public gross fixed capital formation and public current expenditure. The proposed aggregate is more in line with the objectives and policies introduced at the European level such as NextGenerationEU, which requires EU countries to spend a certain percentage of their resources on projects aimed at promoting digital and green transition, scientific research, and social cohesion. Highly indebted countries have significantly decreased the share of GDP for public spending for future generations, especially since the financial and sovereign debt crises. However, countries have not reduced their share of total public expenditure of GDP. It is suggested that national governments and the EU fiscal rules should focus more on the composition of public spending, not only public gross fixed capital formation, but also current expenditures that have long-run effects on sustainable development such as education, R&D and environmental protection.

AbstractThis chapter assesses long-term productivity growth and its immediate determinants in Spain. Over the last 170 years, output per hour worked dominated GDP growth, while hours worked per person shrank by one-quarter and population trebled. Half of labour productivity growth resulted from capital deepening and one-third from efficiency gains (total factor productivity). Labour productivity proceeded steadily, accelerating during the 1920s and from the mid-1950s to the late 1980s, but decelerated thereafter as capital deepening slowed down and TFP stagnated due to the fact that expanding sectors attracted less investment-specific technological progress, largely a result of institutional constraints.

Having defined the fundamental concepts related to the debate on ecosystem services within the framework of Socio-Ecological Systems, and starting from a critique of GDP and traditional accounting systems, new tools and methodologies functional to measuring the well-being and wealth of society are illustrated, which include the accounting of natural capital and associated ecosystem services. The PES (Payments for Ecosystem Services) tool is studied in detail and the possibility of using it for territorial rebalancing and social justice purposes is analysed.

AbstractThis chapter tells the story of how communities in the Amazon are being affected and are resisting the soy Global Value Chain in recent years. By analyzing how different sets of groups (indigenous, ribeirinho, quilombolas, fisherman) are affected by capital and state in the regions of the Lower Tapajós and the Lower Tocantins, this chapter investigates the role of Convention 169 of the International Labour Organization in their resistance. The framework in which capital and state advances in traditional territories is the Arco Norte, a mega infrastructure of road, railroad, and ports being built for the outflow of soy. Despite the huge imbalance of power in each context, to the detriment of traditional communities, this chapter shows that building overarching (international) coalitions and having rights internationally recognized can help the struggles of traditional communities to guarantee their lands, their identities, and their rights.

The aim of this paper is to assess the impact of the demographics on the economic development on the BRICS countries during 2009-2021. The BRICS countries as Brazil, Russia, India, China and South Africa are known starting 2009 (and 2010 for South Africa respectively), they are fast growing economies, emerging markets in the second stage of demographic transition and highly heterogeneous countries in most social economic features. Due to the fact they are counting for more than 40% of the global population, the demographic impact on the economic development should be significant. EViews 8 was used for linear regression with Ordinary Least Squares, where the dependent variable is GDP per capita and the independent variables are age dependency rate, death rate, fertility rate and labor force population 15-64. Correlations, Unit Root Test, Collinearity Test and Granger Causality were performed as well. The findings: There is a strong, positive correlation between GDP per capita and labor force 15-64 and negative correlations between GDP per capita and fertility rate and age dependency rate respectively, which is in line with the previous studies. Among the demographic indicators, fertility rate has a negative influence on GDP per capita, while age dependency rate, death rate and labor force have a positive influence. Death rate was found to have a positive influence on GDP per capital, in contradiction with the previous studies. There is Granger causality between labor force and GDP, as well as between GDP per capita and life expectancy.

Abstract According to IMPACT Study, the annual global cost of corrosion is $2.5 trillion, equivalent to roughly 3.4% of the world's gross domestic product (GDP). Based on available studies and data, mining is an insignificant contributor to the cost of corrosion compared to other economic sectors such as infrastructure, oil and gas, and defense. However, mining operations can be highly corrosive and there have been documented catastrophic failures where corrosion has played a causal role. This raises the question: is corrosion cost properly measured and reported for mining industry? This paper presents case studies from different mining sites to show how corrosion cost is often hidden and not properly tracked, but significantly increases the operational expenditure (OPEX). It also discusses some available methodology and approach to overcome this issue. In addition, an example is included to illustrate how lifecycle corrosion cost data allows effective capital investment decision-making.

The research examines the role of currency regulation in ensuring economic security, and special emphasis is placed on the analysis of this issue from the point of view of public welfare. Income growth as a source of human capital development is impossible without effective state regulation at the current stage of economic development. Regular changes in Russia’s foreign economic activity, economic and political problems at the national and international levels, and the widespread use of modern technology pose a threat to both national and economic security. All this creates the need for regular analysis of statistics on individual indicators, including the detection of violations of currency legislation. The study also analyzed the issue of legal and illegal capital outflows and their impact on the economy; it was determined that the outflow of funds due to legal transactions exceeds illegal ones by many times. This fact underscores the need to introduce measures to minimize net outflows. The factor that determines people’s standard of living has been chosen GDP (PPP) per capita, and reflected the impact of the foreign exchange market on public welfare using regression analysis. The results also explain the import substitution policy of the Central Bank.

Romanian economy has been the champion of the European economic convergence process over the past decades. The GDP/capita at PPS as percentage of the EU average increased from around 30% in 1995 to 79.3% in 2023, a level very close to Poland (79.7%), according to Eurostat estimates. This evolution was determined by the forces of the EU integration, including the massive capital inflows (FDIs, EU funds, remittances), and the human capital outflows. However, the economic growth and development model determined by the EU integration forces seems to come to the end, as pointed out by the recent macroeconomic developments. The annual growth pace of the Romanian economy significantly decelerated in 2023 (to 2.1%) and 2024 (to 0.7% in first half of the year), while the twin deficits persist at very high levels. This paper applies standard econometric tools and uses the International Monetary Fund database in order to assess the structural developments in Romania over the past decades and to identify the main challenges for the coming decade. According to the results, the Romanian economy is facing the risk of another severe adjustment in the coming quarters, due to the unsustainable pro -cyclical income policy, the low efficiency of the investments, and the upward trend of the public debt/GDP ratio (as the financing costs are higher than the the growth pace). Furthermore, Romania is confronted with the risk of initiating a divergence process from the EU average in the future, unless structural reforms are accelerated.

In the past decade, there has been an ongoing trend, primarily among the EU member states, to decrease the legally required minimum capital for the establishment of limited liability companies. This was the effect of the introduction of the “1 GBP company” in the UK which resulted in the outflow of companies from other member states. Shareholders decided to set up companies in the UK instead of their home jurisdictions to take advantage of the lesser capital requirements. This was also possible due to the principle of freedom of establishment within the EU. However, with Brexit in full force, it remains to be seen whether some member states would reiterate from this practice. In the Republic of North Macedonia, the initiative for such amendment of the Company law act by the Government was launched in 2020. In September 2021 the proposal was finally adopted, resulting in the introduction of a new variant of the limited liability company – the so-called “simplified limited liability company” – a limited liability company with a minimum paid-in capital of 1 EUR. From its adoption in 2004 to this date, the Company law act has been amended more than 30 times, making it one of the most often changed legislative texts. A number of these amendments were controversial and even resulted in initiatives in front of the constitutional court for their abolishment. The paper aims to analyze the effect of the introduction of the simplified limited liability company in Macedonian legislation from a legal point of view. The analysis is focused primarily on the necessity, legal status, and effect of these forms of companies in comparison to the other forms of trade companies provided within the Macedonian Company law act. The analysis is conducted primarily through the use of the normative and comparative approach.

The more a country is open to trade, the more it attracts investors and the faster its economy develops. However, some study showed that sometime it can be the opposite of all this. In this context, the main purpose of this study is to investigate the relationship between trade openness, capital formation and economic growth in African countries. To do so, we collected data of GDP per capita, trade (% of GDP), Gross national expenditure and capital formation variables. The method applied is panel cointegration and causality by using time series of 38 African countries for the period of 1990-2014. According to the results there is long run relationship between all the variables and the cross sectional co-integration test result indicates that there is more cointegration in Comoros, Equatorial Guinea, Niger and Guinea-Bissau. With highest GDP per capita, Equatorial Guinea has more long-run relationship between trade openness, capital formation and economic growth. However, one of the poorest countries in the world (Niger), has also efficient long run relationship between the variables. The panel causality test results suggest that there is unidirectional causal relationship from trade openness to economic growth. There is also bidirectional causality link between capital formation and economic growth. In the same context, causal link exists from capital formation to trade openness. The study suggests that African countries must increase the investment promotions in order to increase the capital formation and trade openness then to boost economic growth.

This study aims to investigate the validity of natural resource curse hypothesis in Gulf Cooperation Council (GCC) countries for the period from 1980 to 2014. In doing so, the relationship between real GDP, natural resource abundance, financial development and gross fixed capital is examined using with second generation panel data methodology which allows to cross-sectional dependence among countries. In case of mean group estimation, it is concluded that natural resource rents, financial development and capital positively affects the real GDP in GCC countries. However, in case of individual country estimations, we found that natural resource curse hypothesis is valid only in United Arab Emirates.

In 2024, the macroeconomic adjustment process continued, characterized by a sustained reduction in inflation that began in 2023 and a decline in the current account deficit of the balance of payments. This adjustment took place in the context of a contractionary monetary policy, with a gradual reduction in the monetary policy interest rate. GDP grew by 1.7%, driven by investment and consumption, while employment increased by 2.2%. Foreign reserves remained at adequate levels, and Banco de la República recorded a profit of COP 10,041 billion, benefiting from the returns on foreign reserves. Macroeconomic environment The International Monetary Fund (IMF) and the World Bank estimate that the global economy grew by 3.2% in 2024, a rate similar to that observed in 2023 (3.3%). This occurred in a context of moderating inflation and declining monetary policy interest rates in most countries. Global inflation moderated over the course of 2024. However, inflation rebounded toward the end of the year in some advanced economies, mainly due to rising energy costs. In Latin America, inflation trends were mixed. While some economies experienced sustained price stability, in most cases, inflation remained above the targets set by their respective central banks. Monetary policy interest rates in most Latin American economies continued to decline, reflecting a moderation in inflation and inflation expectations. However, some countries in the region recently raised interest rates in response to renewed inflationary pressures. Oil production increased in 2024, leading to a 3% decrease in oil prices, with Brent crude averaging around USD 80 per barrel. However, geopolitical tensions prevented a more pronounced decline. The U.S. dollar appreciated against most currencies, driven by expectations that the Federal Reserve (Fed) would implement more gradual policy rate cuts. In 2025, global economic growth is projected to be similar to that of 2024, supported by declining inflation, wage recovery, sustained employment growth, and a less restrictive monetary policy stance. However, geopolitical tensions and U.S. trade policies introduce uncertainty. More gradual reductions in the Fed’s interest rate are expected, with the possibility of pauses if inflationary pressures resurface. In Latin America, central banks are expected to continue cutting interest rates, although monetary policy may remain contractionary where inflation has not yet reached target levels. Domestic economic activity Colombia’s GDP grew by 1.7% in 2024, reflecting a moderate recovery compared to the previous year. This occurred in an environment of lower interest rates, improved domestic demand, and an increase in remittances and exports. Private consumption and fixed capital investment—particularly in infrastructure projects such as the Bogotá metro—contributed to economic growth. However, investment in housing declined. Agricultural and services sectors led economic growth, while mining and manufacturing contracted. The loan portfolio experienced low nominal growth, though some segments showed signs of recovery toward the end of the year. For 2025, economic activity is expected to continue recovering, approaching its productive capacity and aligning with the convergence of inflation toward its target. Employment Employment grew by 2.2% in 2024, resulting in the creation of 508,000 jobs. This expansion was driven by rural areas, where employment increased by 3.2%, surpassing the 1.4% growth in urban areas. The commerce, accommodation, manufacturing, public administration, health, and education sectors were the primary contributors to job creation. Wage employment grew by 2.7%, exceeding pre-pandemic levels, while non-wage employment increased by 1.8%, leading to a decline in informality to 55.6%. The national unemployment rate fell by 0.6 percentage points, reaching 9.7%, with a more pronounced reduction in rural areas. For 2025, the unemployment rate is expected to remain stable, supported by a positive economic outlook. Inflation and Monetary Policy Headline inflation in Colombia fell significantly from 9.3% in 2023 to 5.2% in 2024, primarily due to a restrictive monetary policy that moderated domestic demand and contributed to a reduction in the current account deficit. Core inflation (excluding food and regulated products) declined from 8.4% to 5.2%, reflecting the effectiveness of contractionary monetary policy. Inflation of goods dropped sharply, from 7.1% to 0.6%, due in part to the resolution of logistical disruptions and the appreciation of the peso. In contrast, services inflation declined more moderately, from 9% to 7%, influenced by indexation to past inflation and the increase in the minimum wage. Prices of food decreased from 5.0% to 3.3%, driven by lower pressures on processed food prices, benefiting from reduced costs of imported raw materials and a favorable exchange rate. Prices of regulated items dropped to 7.3%, following smaller adjustments in gasoline prices (after the required increases in 2023) and lower electricity and public service tariff increases, except for gas prices, which continued to rise. Inflation is expected to continue converging toward the 3% target in 2025, with headline inflation projected to close the year at around 4.1%, continuing its downward path into 2026. However, new risks have emerged, including a recent rise in producer costs, a significant increase in the minimum wage, and a rebound in inflation expectations. Balance of payments Colombia’s current account deficit narrowed to 1.7% of GDP between January and September 2024, down from 2.5% in the same period in 2023. This improvement was driven by higher remittance inflows, an improved services trade balance, and lower factor income outflows. Remittances reached a record USD 11,848 million, with the United States and Spain as the main sources of these inflows. A decline in the profits of foreign direct investment (FDI) companies, particularly in the oil and coal sectors, also contributed to reducing external imbalances. The trade deficit widened due to a greater imbalance in the trade of goods within a context of lower commodity prices. However, this was partially offset by strong agricultural and industrial exports. Additionally, the good performance of service exports, supported by higher international tourist arrivals, helped contain a larger trade imbalance. The financial account recorded net capital inflows equivalent to 1.1% of GDP, lower than the 2.5% recorded in 2023, primarily due to a decline in foreign direct investment in mining, transportation, and oil. This was partially offset by growth in financial and business services investment. The current account deficit is estimated to have closed 2024 at 1.8% of GDP, with a projected widening to 2.5% in 2025, in line with higher expected economic growth and stronger domestic demand. Public finances According to preliminary figures from the 2025 Financial Plan (PF-25) presented by the Ministry of Finance and Public Credit (MHCP), Colombia’s General Government deficit reached 4.8% of GDP in 2024, marking a 2.1 percentage-point increase compared to 2023. This deterioration was mainly driven by a worsening in the balances of the Central National Government (GNC) (2.6 pp) and the Social Security subsector (0.4 pp), partially offset by a 0.8 pp improvement in Regional and Local Government balances. The reduction in the deficit position of the Fuel Price Stabilization Fund (FEPC for its acronym in Spanish) was notable, following gasoline price adjustments, which closed the gap between the reference price and local market prices. However, fiscal pressures persist due to ongoing subsidies for ACPM (diesel fuel). The total and primary deficits of the Central Government stood at 6.8% and 2.4% of GDP, respectively, driven by a decline in tax revenue—particularly from income and external taxes—alongside increased government spending. The net debt of the Central Government increased to 60% of GDP, exceeding previous forecasts. For 2025, a total and primary deficit of 5.1% and 0.2% of GDP is projected, with tax revenue expected to grow by 22.6%. Compliance with the fiscal rule and the stabilization of public finances will be critical in 2025, given the potential impact of fiscal slippage on the country’s risk premiums. Failure to meet fiscal targets could raise interest rates for both the Government and the broader economy. Maintaining credibility in fiscal policy will be key to preventing macroeconomic adjustments from exerting additional pressure on interest rates. International Reserves As of December 31, 2024, Colombia’s net international reserves stood at USD 62,481 million, reflecting an increase of USD 2,873 million during the year. This growth was primarily driven by returns on reserves, which reached 3.65%, benefiting from higher global interest rates, and Banco de la República's reserve accumulation program, which added USD 1,479.4 million to reserves. According to the IMF’s reserve adequacy methodology, Colombia maintains a reserve ratio of 1.29. This falls within the adequate range (1.0 – 1.5), indicating that Colombia’s reserves are sufficient to withstand extreme external shocks and balance of payments risks. Profits obtained by Banco de la República The Bank's profits reached a record COP 10,041 billion in 2024, resulting from revenues of COP 13,948 billion and expenses of COP 3,907 billion. Profits increased by COP 815 billion compared to 2023, primarily due to lower expenses, although partially offset by a decline in revenues. For 2025, profits are projected at COP 10,512 billion, supported by the high expected profitability of foreign reserves. However, this projection is subject to uncertainty related to reserve performance and monetary base growth.

Double Tax Agreements (DTAs) between treaty parties usually ensure the appropriate division of taxing rights and benefits between treaty partners. However, when a DTA is between a capital-exporting nation and a capital-importing country, the negotiations and DTA may be marred by unequal bargaining powers between the countries. Thus, capital-exporting nations often influence the fundamental design of these treaties to favour the entities in their economies that are responsible for the capital outflow. This paper aims to understand the potential detrimental impact of one clause – the most favoured nation (MFN) clause in DTAs – on revenue collection and tax certainty for host/capital-importing nations. The study takes into consideration the recent tax litigation and controversies surrounding MFN clauses in India, South Africa, the Philippines, and Colombia, to assess the impact of negotiated MFN provisions on the Global South. Interestingly, neither the OECD nor the UN Model Tax Convention has a standard MFN provision. Therefore, we explore whether a template for MFN clauses can be framed to help Global South countries to protect their interests against capital-exporting nations.

Double taxation agreements (DTAs) usually ensure appropriate division of taxing rights and benefits between the treaty parties. However, when a DTA is between a capital-exporting and capital-importing country, the negotiations and DTA may be marred by the unequal bargaining power of the countries. Capital-exporting nations often influence the fundamental design of these treaties to favour the entities in their economies that are responsible for the capital outflow. This paper aims to understand the potential detrimental impact of one clause – the most favoured nation (MFN) clause in DTAs – on revenue collection and tax certainty of host/capital-importing nations. The study considers recent tax litigation and controversies surrounding MFN clauses in India, South Africa, the Philippines, and Colombia, to assess the impact of negotiated MFN provisions on the Global South. Interestingly, neither the Organisation for Economic Cooperation and Development (OECD) nor the United Nations (UN) Model Tax Convention has a standard MFN provision. Therefore, we explore whether a template for MFN clauses can be framed to help Global South nations protect their interests against capital-exporting countries.

The Value-Added Tax (VAT) is the most prevalent consumption tax globally, yet it is frequently deemed highly regressive. To address this, we propose a Personalized VAT (PVAT) devised in conjunction with a distributional policy. We aim to achieve three objectives: increase revenue collection, achieve progressivity, and disrupt the intergenerational dependency of low-income households. We use Mexico as a case study, showing that eliminating all special VAT regimes and standardizing the rate at 16% could contribute an additional 2.2% of GDP to fiscal revenues. However, such a reform could have severe negative welfare impacts on the poor. To tackle this dilemma, we propose several PVAT scenarios. Our results indicate that a PVAT could be fiscally neutral or even increase revenues by up to 0.83% of GDP, while benefiting the lowest-income households. Lastly, we analyze the general equilibrium effects of a PVAT and various distributional policies, including lump-sum and capital transfers. For this purpose, we employ an overlapping generations model calibrated for Mexico. Our simulations reveal welfare enhancing and output growth results through a PVAT policy that includes capital transfers, thereby presenting a viable strategy for breaking intergenerational dependency.

This policy brief discusses the long-term economic growth prospects of the Republic of Uzbekistan. Among the drivers of economic growth are tourism, human capital, capital markets, and privatization. Measures to tap on these sources of economic growth adopted by the government are outlined. The policy brief also offers additional measures that could be used by the government to maintain brisk GDP growth rates.

We investigate whether central banks are able to attract or redirect capital flows, by bringing together the entire empirical literature into the first quantitative meta-analysis on the subject. We dissect policy effects by the type of flow and by the origin of the monetary shock. Further, we assess whether policy effects depend on factors that drive investors to either search for yields or fly to safety. Our findings indicate a mean effect size of inflows in the amount of 0.09% of quarterly GDP in response to either a 100 basis point (bp) increase in the domestic policy rate or a 100bp reduction in the external rate. However, the effect size under a random effect specification is much lower (0.01%). Factors that significantly attract inflows include foreign exchange reserves, output growth, and financial openness, while factors that deter flows include foreign debt, capital controls, and departures from the uncovered interest rate parity. Also, both local and global risks matter (global risks exerting a larger pressure). Finally, we shed light on differences across the different types of flows: banking flows being the most responsive to monetary policy, while foreign direct investment being the least responsive.

Small and medium-sized enterprises (SMEs) are vital in promoting economic growth, accounting for 90% of businesses, providing 60 to 70% of employment, and contributing 50% of the world’s GDP (World Bank). They are the backbone of societies worldwide, supporting livelihoods, especially among the working poor, women, youth, and vulnerable groups. With the proper support, SMEs have the potential to transform economies, promote job creation, and foster equitable economic growth. According to the International Finance Corporation (IFC), approximately 65 million businesses in developing countries, representing 40% of formal SMEs, require an additional US$5.2 trillion in financing annually (World Bank). This amount is equivalent to 1.4 times the current global SME lending. Bridging this financing gap requires improving the ecosystem and introducing innovative tools to facilitate financing. SMEs need better access to capital markets and should explore new methods to acquire funding and sustain growth. The Sukuk Enhancement Fund (SEF) proposal by researchers at the Islamic Development Bank Institute (IsDBI) aims to help SMEs access capital markets for sustainable growth and financial resilience.

This paper constructs a small CGE model to study the impact of carbon taxes on GDP and emissions under alternative closure rules and hypotheses (about mobility of factors, availability of alternative technologies and labor market disequilibrium). The model is simulated for Argentina, Brazil, Chile, El Salvador, Jamaica and Peru. The paper evaluates the costs of lowering emissions under different scenarios and finds that: i) those costs are lower under full employment and when international mobility of capital is limited and are higher when those taxes are not imitated by the rest of the world; ii) the compensation of carbon taxes with other taxes can help to reverse GDP and welfare losses; iii) alternative technology effective application will be reduced when it is intensive in capital from the rest of the world. The second part uses the assessment of costs of abatement of emissions with carbon taxes in an Integrated Assessment Model.

This paper explains in detail the external sustainability assessment approach given by the stock-flow relationship between the net external positions, non-income current account plus net capital transfers, and real exchange rate. This approach consists of determining the non-income current account over GDP that would stabilize a benchmark net foreign asset (NFA) position over the medium term, and a "gap" by comparing the NFA-stabilizing non-income current account over GDP with the nonincome current account expected to prevail over the medium term. Additionally, the paper addresses the role of the returns differential in explaining the channels through which the external sustainability adjustment may occur (i. e., trade and financial channels).