CAPITAL CONTROL Meaning and
Definition
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Capital control refers to a set of measures implemented by a government or central bank to regulate the flow of capital into or out of a country's economy. These measures are usually introduced as means to stabilize the domestic economy, protect the national currency, manage balance of payment deficits, and maintain financial stability.
By imposing capital controls, authorities can restrict or regulate various forms of financial transactions, such as foreign exchange transactions, investments, loans, or transfers of money abroad. The control can be achieved through various methods, including taxes, tariffs, limitations on repatriation of funds, restrictions on foreign currency exchange, quotas on capital flows, or even outright bans on certain transactions.
Typically, capital controls are implemented during times of economic turbulence, including financial crises, massive capital outflows, or instances of extreme inflation. They are intended to shield the economy from sudden external shocks that could lead to severe economic consequences, such as a currency collapse or depletion of foreign currency reserves.
The effectiveness and desirability of capital controls remains a subject of debate among economists. Proponents argue that these measures can provide short-term relief during economic crises and prevent speculative attacks on the currency. On the other hand, critics contend that capital controls can hinder economic growth, discourage foreign investment, distort market mechanisms, and create economic inefficiencies.
Overall, capital controls are a policy tool used by governments to regulate capital flows and manage economic stability, albeit with varying degrees of success and controversy.
Common Misspellings for CAPITAL CONTROL
- xapital control
- vapital control
- fapital control
- dapital control
- czpital control
- cspital control
- cwpital control
- cqpital control
- caoital control
- calital control
- ca0ital control
- caputal control
- capjtal control
- capktal control
- capotal control
- cap9tal control
- cap8tal control
- capiral control
- capifal control
- capigal control
Etymology of CAPITAL CONTROL
The term "capital control" originated from the combination of two words: "capital" and "control".
The term "capital" comes from the Latin word "caput", which means "head". It was initially used in Latin to refer to wealth, property, or assets that were considered valuable and essential. Over time, the word "capital" evolved to denote financial wealth, investments, or funds used to generate income.
The word "control", on the other hand, comes from the Latin word "contrarotulus", which means "a counter-roll" or "a register". It refers to the act of managing, supervising, or overseeing a person, group, or process.
When combined, "capital control" refers to the measures or policies undertaken by a government or central bank to regulate the flow of money, financial assets, or investments across borders.
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