CONCENTRATION OF CAPITAL IN THE CONTEXT OF FINANCIAL GLOBALISATION

Abstract

In the early 1990s, capital flows across borders accelerated, growing faster than global trade and production. On the political side, the growth of financial flows was facilitated by the liberalisation of capital accounts, particularly in emerging and developing countries. The purpose is to study the main features of the impact of capital concentration in the context of financial globalisation on income inequality. Globalisation and capital concentration are making the global economy more complex and dynamic. The study of these processes is necessary for making effective management decisions and adapting to changing conditions. The study of capital concentration in the context of financial globalisation is an integral part of modern economic research and plays an important role in ensuring stability, equity and prosperity in the world. Financial globalisation is considered in the article as a process of increasing interconnections and interdependencies of national financial systems, which leads to the free movement of capital, goods, services and people between countries. In the context of financial globalisation, capital concentration has a number of features, which, among other things, are associated with uneven distribution of income among the population. It is proved that governments can use various regulatory instruments to regulate the specifics of relations arising from capital concentration (antitrust legislation; tax policy and securities market regulation). Financial globalisation tends to promote economic growth, but also to increase inequality, the former probably desirable and the latter not so much. But neither of these outcomes is predetermined. A growth-enhancing trend in capital flows is likely to be evident only in countries that first make progress in strengthening policies and institutions, thereby limiting the volatility of these flows and providing some assurance that they are directed to the right targets and sectors. The tendency for capital flows to increase inequality can be limited by policies that shape the composition and timing of capital flows, and thus prevent the associated increase in aggregate volatility and the frequency of crises.