What are global capital flows?

Global capital flows are like money going on a fun trip around the world.

Imagine you have a piggy bank full of coins, and your friend has one too. You both live in different cities, maybe even different countries. Sometimes you want to give some of your coins to your friend so they can buy more toys, or maybe they want to send you some coins so you can get ice cream. When money moves from one place to another like this, whether between friends, cities, or even countries, that's capital flow.

Think of big piggy banks, like those in huge companies or governments. They also send and receive coins (money) all over the world. If a country is doing really well, other countries might want to send them money so they can buy more stuff from there. That's like getting extra coins from your friend because you're having a great time playing together.

Sometimes, when one place has too many coins and another doesn’t have enough, money moves between them, just like how you might trade coins with your friend during recess. This is global capital flow in action!