Ünite 8: International Capital Movements — Önemli Kavramlar

An accounting system that records all economic transactions between the residents of a country and the rest of the world over a specific period. It is based on double-entry bookkeeping, meaning its total balance must always equal zero.

A primary account in the balance of payments that records the net value of exports and imports of goods and services, alongside investment income and transfer payments. For example, Turkey's current account balance in 2018 was -27.8 billion dollars, indicating a deficit.

An account in the balance of payments that records unilateral transfers, such as international donations, aid, and unrequited payments between nations. It usually has a very small balance relative to the current account.

An account that records the net value of financial assets and claims bought and sold between a country and the rest of the world, excluding official reserve changes. Transactions are recorded as credits for fund inflows and debits for fund outflows.

Long-term financial flows arising from the acquisition of a foreign company, establishment of a new business, or lending to a foreign company controlled by the investor. It involves the transfer of technology and managerial control.

The purchase or sale of foreign capital market instruments, such as equities and bonds, solely for financial return and portfolio diversification. Unlike FDI, portfolio investors have no intention of managing or controlling the company.

Highly liquid, quasi-money assets held by a country's government or monetary authorities (like the Central Bank) that are universally accepted for international payments. These primarily consist of gold and foreign currencies.

A balancing item in the balance of payments, also known as net errors and omissions, used to reconcile differences arising from mismeasurements or unreported private capital flows. In 2018, Turkey's statistical discrepancy was approximately 21 billion dollars.

The difference between the increase in a country's foreign financial assets and the increase in its foreign financial liabilities. This value is mathematically equal to the current account balance.

Capital flows based on debt instruments with a maturity of less than one year, such as demand deposits, currency, and treasury bills. These flows are highly liquid and often driven by speculative motives.

Speculative activities where investors engage in massive, coordinated buying or selling of an asset or currency to drive its price in a certain direction, aiming to profit by reversing their positions once the target price is reached.

A form of Foreign Direct Investment where a parent company builds a completely new operational facility or business line from the ground up in a foreign country, directly creating new jobs and production capacity.

A practical rule recommended by the IMF and OECD to distinguish between FDI and FPI. If a foreign investor holds 10 percent or more of a company's shares, it is classified as FDI; otherwise, it is FPI.

A financial crisis that occurs when the banking sector in a country faces widespread insolvency, becomes unable to fulfill its lending functions, and experiences a contraction in credit, leading to a recession.

A crisis characterized by a sudden, unexpected, and massive collapse in the value of the domestic currency, leading to a rapid loss of international reserves or uncontrollable currency depreciation.

A crisis that occurs when a debtor (private or public) cannot fulfill interest or principal payment obligations on time, leading to debt restructuring, asset devaluations, and reduced spending.

The phenomenon where a financial crisis or economic turbulence starting in one country spreads rapidly to other countries through trade links, financial connections, or investor panic.