How do Carmen Reinhart and Kenneth Rogoff account for the paradox of capital flowing from poorer to wealthier nations?

Balance of Payments, Aid and Foreign Investment MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

Balance of Payments, Aid and Foreign Investment

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Subject
Balance of Payments, Aid and Foreign Investmenteconomics-mcqs › balance-of-payments-aid-and-foreign-investment
Published
2 Jun 2019
Last updated
28 May 2026

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Explanation

Reinhart and Rogoff attribute the paradox of capital moving from poor to rich countries primarily to the pricing of political and credit risks in many less developed countries, which discourages investment despite potentially higher returns.

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