The impact of monetary and fiscal policy on international capital movements - Case study of China

Mohamad Bilal

Diplomová práce

Abstract:

This research will focus on examining how monetary and fiscal policy play a significant role to attract and motivate the movement of international capitals. The main aim of economic policy is to establish economic stability at full employment without an increase in the general level of prices, and this goal will not be accomplished without the use of effective policies, which can be fiscal policy, monetary policy, or a combination of both. Fiscal policy has a substantial influence on the goods and services markets, with government spending and taxation serving as its primary instruments. In terms of monetary policy, its main tools are the discount rate, reserve requirement, and open market operations; the interest rate connects the two markets. Both policies, through their tools, perform a significant role in the transfer of international capital, which has become the focus of their work in various countries around the world. This research is divided into two parts, theoretical and practical. The theoretical part discussed the concept of monetary policy and its importance, by presenting the objectives and instruments of monetary policy and The concept of fiscal policy in terms of its objectives and instruments. The second section focused on the movement of direct foreign capital by explaining the concept and significance of the movement of direct foreign capital, determinants of the movement of direct foreign capital, and the most important types of direct foreign investment. The last section discussed the impact of each policy on the transfer of international capital has been explained, by studying the impact of monetary policy instruments represented by the exchange rate and deposit interest rate also studying the impact of fiscal policy instruments represented by the general government final consumption expenditure on the movement of international capital represented by foreign direct investment. In the last phase, statistical analyses were tested using regression analysis in the case of study China.

Keywords

monetary policy, fiscal policy, interest rate, exchange rate

Jazyk práce: angličtina

Datum vytvoření / odevzdání či podání práce: 30. 11. 2021

Obhajoba závěrečné práce

• Vedoucí: prof. Ing. Mansoor Maitah, Ph.D. Ph.D.

Česká zemědělská univerzita v Praze

Provozně ekonomická fakulta

Magisterský studijní program / obor:
Economics and Management / Economics and Management