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Economics

Study Notes

What is Capital Flight?

Level:
A Level
Board:
AQA, Edexcel, OCR, IB

Capital flight is the uncertain and rapid movement of large sums of money out of a country. The UK Overseas Development Institute (ODI) defines capital flight as "the outflow of resident capital which is motivated by economic and political uncertainty."

One policy to limit the amount of capital flight is for a government to introduce capital controls which control how much money people can take out of a country. However illegal capital outflows are much harder to stop.

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