Free flow of capital in developing countries Today, there are very few who oppose free trade, however, the idea of ​​capital mobility to and from towards developing countries is a highly debated issue. Capital is finance (money) or assets, used to produce other goods. Capital can be further divided between equity debt and equity/financial capital. Equity capital or financing is money raised by a business in exchange for an ownership stake. Ownership is achieved through equity shares. Debt capital is funds borrowed from a business that must be repaid over a period of time, usually with interest. Typically, short-term debt is less of a concern because if shareholders sell off, the value of the stock declines and the shareholder is hurt. The company isn't necessarily hurt now, but it will have trouble raising money through future share issues. Debt is more worrying. If the short-term debt is not rolled over, the company must liquidate assets in order to pay. Therefore, capital mobility is the free flow of liquid investments from one country to another. Now, although capital mobility can finance the world's developing countries, raise wages, and create a more competitive world market (which is very beneficial for consumers); there are negative effects including income inequality, corruption and poor management of capital control. This article will address both the positive and negative aspects of capital flows in order to further analyze the theory of capital mobility. Before continuing it is necessary to examine some of the background and purposes of capital flows. Only until around 1980 did developing countries see this idea as positive. Previously there was the feeling that with foreign capital a... medium of paper... you absolutely had to approach with caution, because capital flows are too unstable to play with. Resources - Classroom notes: “Trade and capital flows” - Classroom handout: “Trade and employment” - Hartwell, A. Christopher. Policy Analysis: The Case Against Capital Controls. The CATO Institute. Washington DC, June 14, 2001.- http://econ.cudenver.edu/beckman/econ4410/stiglitz-world%20crisis.doc- http://quote.bloomberg.com/apps/news pid=10000039&sid=aFNcMq9i7rx0&refer=columnist_derosa - http://www.bepress.com/ev/vol1/iss1/art1/- http://0-firstsearch.oclc.org.skyline.cudenver.edu/WebZ/FSFETCH?fetchtype=fullrecord:sessionid=sp07sw02- 58421-e0iyjwrgp5q5z:entitypagenum=3:0:recno=1:resultset=1:format=FI:next=html/record.html:bad=error/badfetch.html:entitytoprecno=1:entitycurrecno=1:numrecs=1