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And more stable direct investments account for an increasing share of capital inflows.
Many are wary of capital inflows, having been hit by their reversal in the past.
"It's the battle for Asian dominance after a record year of capital inflows".
Basically, the shock was a loss of export demand from Asia and a drying up of capital inflows.
Most of that money went to the United States — hence our giant trade deficit, because a trade deficit is the flip side of capital inflows.
Headlines about rising inflation, rampant bank lending and a flood of capital inflows might appear to suggest that virtually all emerging economies are overheating.
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ARE some kinds of capital inflow better than others?
And European interest in acquisitions in the United States, a main source of capital inflow, is diminishing.
Not even those who consider America's present rate of capital inflow worryingly high.
This makes Mr Wolf's first question urgent: how should countries make finance safer without resorting to the destabilising policy of capital dumping?The answer begins by distinguishing different types of capital inflow.
Of all the companies or activities in developing countries that could make good use of foreign capital, comparatively few are currently in a position to attract FDI.A pity, because the economic evidence, such as it is, seems to confirm that FDI is on balance the most desirable form of capital inflow.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com