Theory And Demonstrative Analysis Of International Short Term Capital Flow Shocks

Movement of international short term capital has become a most active force in the modern world economy. It exerts a vigorous impact on the global distribution of international financial resources, alters the efficiency of economic operations, and obviously intensifies the changeability and uncertainty of the supply demand relations and price signals of various financial dealings. International short-term capital, with its large scale and convenient movements, has been playing an important role in the effectiveness of macroeconomic policy made by all governments, as well as the micro decision of multiple economic subjects.Guided by this financial background, the text, applying the analysis method of modern economics, and using revenue - cost curve, the analytic tools in micro-economy as the breakthrough point, systematically interprets essential motive and impact operating mechanism of international short term capital movement through constructing the most optimized financial portfolio model and cost - revenue impact model of international short term capital movement. On this basis, the text also gives a specific analysis to the behavior and influence of impact by movement of international short term capital in China, and finally provides a tackling proposal through integration of theory with practice.The text is meant to 1,Elaborate the theoretic and realistic significance of the topic studied, and describe the angles of study, breakthrough point, and main contributions and innovation of the text.2,Explore the Modern Portfolio Theory, present the anticipated earning rate of financial portfolio in the world range, and considering that transnational investment may result in risk increase or risk reduction, use cost - revenue curve to uncover the essential cause for movement of international short term capital through constructing the most optimized financial portfolio: that is, short term capital movement occurs after the investors have analyzed all the possible anticipated revenues and risks of financial portfolio in the world range before getting a most optimized financial portfolio.3,Put forward the revenue - cost model of international short term capital flow shocks from the angle of countries likely to suffer the speculative impact (revenue: growth rate of domestic GDP pushed by flow of international short term capital; cost: risks of speculative impact by foreign investors), in allusion to the cause of the above-mentioned movement of international short term capital, and on the basis of Krugman first generation and Freud second generation of shocks models of international short term capital flow. And the text applies economics cost - revenue curve to analyze the influence on a country's economic variables by speculative impact, and the policies to choose for the country.4,Give a particular introduction to the channels and status of our country's international short term capital flow shocks on the ground of the above analysis and theory, and provide the countermeasures to the shocks, which mainly include: I. promote the healthy and steady operation of domestic financial departments and eliminate financial frangibility; II. push vigorously money market construction and develop the open market business; III. reform the asymmetric foreign exchange control, gradually ease the control of exchange purchasing, and improve the control efficiency of remaining capital; IV.develop the system of qualified domestic institutional investors, and achieve the gradual freedom of overseas investment; V. arrange reasonable exchange rate and weaken the internal motive of idle capital shocks .5,As the liberalization of Chinese capital account is the strategic measure coping with international short term capital flow shocks, the test concludes with a specialized elaboration on pre-conditions and sequence of further liberalization of Chinese capital account .